Basic value computation in Forecasting

[Former Member]

Hi Gurus.

Can anyone help me on how basic value is computed?

Please see below sample:

Forecast model T

Period Indicator M

Historical periods 6

Forecast periods 1

Periods per season 12

Initialization X

Model selection A

Optimization level F

Alpha factor 0.10

Delta factor 0.30

Selection procedure 2

Basic value 5.975

MAD 2

Safety Stock 6

Error total -8

Reorder Point 18

Consumtion values

6.201

5.201

4.201

3.201

2.201

1.201

12.2009

11.2009

10.2009

9.2009

8.2009

After forecasting run below values were derived:

Basic value 3.739 -->>> how was this derived? what is the formula?

MAD 2

Safety Stock 6

Error total 1

Reorder Point 8

Thanks in advance.

[madlercm]

Hi,

You can learn about the formulas here : http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c279b9454011d182b40000e829fbfe/content.htm

but I suggest that you also learn more in depth the meaning of the parameters, and how to properly use them:

http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c2726b454011d182b40000e829fbfe/content.htm

For example, it doesn't make sense (I think) that, in your example, you use a trend model, check for seasonality, and there are 12 periods (months) per season!

Regards,

Mario