Sales Forecasting

The Forecasting Process
 

An essential ingredient in any level of the planning process is sales or demand forecasting. While generating a statistical forecast is critical, developing a collaborative process to communicate the forecast (and adjustments to it) up and down the organization is equally, if not more important. PSI Planner is the perfect tool to help accomplish both of these important tasks.

PSI Planner as the Demand Management "Mechanism"
 

All Distribution Requirements Planning (DRP) systems require an item-location demand forecast to drive replenishments (except in the case of "make to order" items). PSI Planner gives users the option of importing forecasts from another system, or generating them from historical data utilizing regression analysis with seasonality (or the choice of several time series formulas such as weighted average) and an optional smoothing factor. The user can make manual adjustments to the item-location ("SKU") forecast based upon any current knowledge, and then aggregate resultant forecasts nationally, regionally or by other criteria such as product class or market zone (in units, dollars, weight, etc.). This enables the user to initiate a dialogue with Marketing, Sales and Finance with the goal of arriving at a consensus item-national forecast. The consensus forecast, if different from the statistical forecast, can then be prorated back down to the item-location level and be used to drive deployment and production planning decisions.

PSI Planner is also the perfect mechanism to capture any "advance warnings" of incremental demand communicated by sources such as field sales regarding new distribution and special promotions. This information can be entered through an adjustment to the item-location forecast and documented via an on-line note for future reference.

Other Features
  Other important related features of PSI Planner are

Calculation of safety stock requirements based upon desired Customer Service levels
ABC "Pareto" analysis (i.e. the 80/20 rule used for inventory management), which can be performed either nationally or by location
Forecast Variance Reporting system to measure forecasted versus actual demand

PSI Planner makes the demand planning process flow smoother through easy data import and export capabilities (in addition to a variety of standard reports and graphs).