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Advanced demand forecasting for Prophet 21 provides you with greater inventory accuracy by automatically identifying the unique demand pattern for each item you stock. Using an intuitive system of industry-proven weighted averages, standard reports, graphical views, and flexible, user-defined formulas, demand forecasting functionality increases the accuracy of your forecast, and improves your understanding of the relationship between forecast and usage patterns.

Demand Analysis

The demand pattern identification window in Prophet 21's inventory module automatically analyzes the demand for every item in your warehouse, and gives you the flexibility to specify your analysis by item or location ID, product group, supplier, or ABC class. This process automatically chooses the weighted formula that best fits the item's usage history to provide you with the most accurate forecast for the upcoming period. After the analysis is complete, you can view a detailed results window that shows an item-by-item breakdown of the current demand pattern as well as the newly proposed pattern. By displaying the new demand pattern - either level, seasonal, slow, trend, or erratic - for each item in a dropdown window, advanced demand forecasting allows you to accept the new pattern, or select a different demand pattern than the one proposed by the system.

This functionality allows you to predict the demand for a new item, even if it has not yet acquired sufficient purchase history, by choosing "behaves like" from the dropdown menu in Prophet 21's item maintenance window. For example, if you are adding a new rubber mallet to your line of hammers, all you have to do is select the item for which you would like the new mallet's forecast to mimic, and Prophet 21 will automatically calculate the demand based on the performance of the existing item.

Weighted Averages

Advanced demand forecasting functionality applies a series of statistically proven, distribution-specific weighted formulas to each item within the demand calculation to give you a more accurate performance forecast than that of a simple average. For example, if the selected formula has six periods, Prophet 21 will multiply the usage for each period by the proper weight, and then divide the product by six, which results in a weighted average that offers you the most accurate forecasting information.

To forecast the performance of trending items, advanced demand forecasting applies a weighted trend factor to the forecast usage that provides you with an accurate understanding of the movement of an item. Derived using the same industry proven statistics as a weighted formula, the trend factor is multiplied to the final weighted average to produce a usage forecast that accounts for the unique usage rates of both upward and downward trending items.

To ensure that every usage forecast best fits your company's needs, Prophet 21 gives you the flexibility to customize any weighted formula or trend factor. If you find that a specific formula not contained in Prophet 21 accurately calculates the demand for a certain item, all you have to do is insert it into the proper period in the forecast formula maintenance screen.

Improved Understanding

In order to foster a greater understanding of your inventory, advanced demand forecasting includes graphical displays of the actual usage, forecast usage, and the current formula forecast. Located in the item history and item master inquiry windows, these graphs allow you to compare actual usage and forecast usage under the current demand pattern. By analyzing the relationship between actual and forecast usage, you will be able to see how the current forecasting pattern fits your business model, and make any necessary changes.

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