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Forecast Pro Unlimited V8 User`s Guide

1. 64 Building Event Models Select MintyFresh24 on the Navigator The prominent peaks on the graph are not due to seasonal patterns they are the result of price promotions Select MintyFresh32 on the Navigator This series represents sales of the same product in a different size package _promos is an event variable we will discuss this variable shortly Let s begin by modeling MintyFresh24 and MintyFresh32 using expert selection Click the red Forecast icon When the calculations are complete view the forecast report for MintyFresh24 Notice that a nontrended additive seasonality exponential smoothing is selected and that the adjusted R square is 0 50 Exponential smoothing recognized the effects of the promotions as a form of irregular seasonality The forecasts from such a model tend to repeat the promotional pattern of the last year of historic data If as is usually the case your future promotions are patterned differently the forecasts may be very bad EJ Forecast Pro Unlimited 64 bit Tutorial 6 mouthwash MI pan gt X File Settings Operations Project View Window Help 0005564640804 00006 MintyFresh24 1 though 01339 3 Total MintyFresh24 MintyFresh32 MintyFresh24 24 ounce bottle of MintyFresh Mouthwash _Helpers Tutorial 6 mouthwash Graph _promos Tutorial 6 mouthwash Forecast Report E Component Smoothing Wgt Ready
2. Include the fitted values on the graph This is accomplished by toggling on Fitted on the graph s context menu Notice that the model predicted several peaks that did not occur as well as missing several that did The model is trying to capture the peaks as part of the seasonal pattern However the promotions that caused these peaks did not always fall in the same months and thus cannot be modeled using a seasonal model Modeling a Recurring Promotion 65 Right click on the graph window to call up the context menu and select Manage Events to open the event manager Use the Schedule dropdown located at the bottom of dialog box to select the _promos schedule The _promos schedule contains two types of event codes Event code 1 Price promotion 1s used to indicate periods where the product was on promotion Notice that the dates listed correspond to the strong peaks in the data and include two points during the forecast period where a promotion is scheduled Event code 2 Competitor promotion 1s used to flag periods where the primary competitor to MintyFresh was running a promotion Click Commit to build the event model Forecast Pro Unlimited 64 bit Tutorial 6 mouthwash OES File Settings Operations Project View Window Help 060 505 664 064 04 56 0046 MintyFresh24 2009 1 5 Srough 2013 9 Holdout 0 J Total ES Tutorial 6 mouthwash Graph ol 8 MintyFresh24 EVENT _promos MintyFresh32 MintyFresh24
3. Project0l Forecast Report p Forecast Report for SKU087 Raw hierarchy is SKU087 Expert Analysis Using rule based logic have narro rfori n will perform an out of sample za The cumulative MAD for Exponentia The roling out of sample test used Ready Click the Edit button to open the Manage Event Codes dialog box The event code 0 is always used to indicate no event occurred Therefore it is predefined and No Event already appears in the bottom portion of the dialog box as a defined event type Edit the description displayed for Event Code 1 to read Free gift month and click the Add button Notice that the event type is added to the list with a status of Pending and that the dialog box is now ready for you to define Event Code 2 Edit the description displayed for Event Code 2 to read Partial free gift month and click the Add button Your screen should now match the one shown above Click Commit to accept the new event codes and then Exit to return to the Manage Event dialog box We are now ready to specify where the events occurred 62 Building Event Models 3 Forecast Pro Unlimited 64 bit Project01 G zaj File Settings Operations Project View Window 0000066400804 0086 2011 1 through 2013 12 i Hodout 0 SKU087 Sy Project0l Graph SKU087 2 Orange Square Tub with Lid 2011 Jan 2012 Jan n 2014 Jan E History E Fitted Values HM Forecasts M
4. ST 20 02 2007 11 H twoug 2012 16 E Hod oS Add to Hot List Custom Modifier Remove Modifier s Apply Modifier s To Top Down Indexes Expand All Collapse All Expand All To Current Add this item 34 The Basics GS Project03 Graph fe e iss This Item Incl Children Incl Descendants Incl Siblings Related End items 123 Bakery Inc Stuff Mart Customer This Level This Plus Parent Levels This Level Matching Analysis 2010 Jan 2011 Jan 2012 Jan 2013 Jan WM Forecasts MMB Forecast Interval Now select Total gt Muffins gt Stuff Mart on the Navigator and right click to bring up the Navigator s context menu and select Add to Hot List Notice that there is a full range of options to add items to the Hot List Children Parents and Siblings refer to one level down on the current branch one level up on the current branch and the same level on the current branch respectively In the Analysis menu selection Overrides refer to items with direct overrides and Affected refers to items with indirect overrides 1 e items where a direct override elsewhere in the hierarchy changed the items forecast Experiment with adding and removing items from the Hot List until you are comfortable with its operation Clear the Hot List select Total gt Muffins gt Stuff Mart on the Navigator invoke the Navigator s context menu and select Add to Hot List gt This Level Your screen
5. 12 count Bran Muffins 12 count Blueberry Muffins 12 count Apple Muffins 12 count Corn Muffins 12 count Blueberry Muffins 12 count Apple Muffins 12 count Corn Muffins 12 count Blueberry Muffins 12 count Apple Muffins 20 oz Vanilla Layer Cake 20 oz Strawberry Pound Cake 20 oz Low Fat Pound Cake 20 oz Lemon Pound Cake 20 oz Coconut Layer Cake 20 oz Chocolate Layer Cake 20 oz Carrot Layer Cake 20 oz Butter Pound Cake 20 oz Vania Layer Cake 20 oz Low Fat Pound Cake 20 oz Coconut Layer Cake 20 oz Chocolate Layer Cake 20 oz Carrot Layer Cake Point forecasts 6 544 79 Point forecasts 5 610 79 Point forecasts 15 771 07 Point forecasts 5 527 30 Point forecasts 1 539 22 Point forecasts 7 050 28 Point forecasts 7 050 96 Point forecasts 5 544 37 Point forecasts 5 318 17 Point forecasts 4 124 80 Point forecasts 3 672 26 Point forecasts 5 615 60 Point forecasts 5 089 47 Point forecasts 15 231 36 Point forecasts 16 285 30 Point forecasts 10 351 86 Point forecasts 1 914 44 Point forecasts 3 451 17 Point forecasts 3 150 59 Point forecasts 1 915 88 Point forecasts 13 502 79 Point forecasts 14 196 58 Point forecasts 5 213 17 Point forecasts 6 146 20 Point forecasts 10 598 52 Point forecasts 8 149 59 Point forecasts 6 020 59 Point forecasts 7 201 53 m 8 458 63 7 793 47 14 481 00 5 624 48 2 022 17 7 050 28 7 512 02 7 329 77 7 949 04 4 853 74 4 075 40 6 9
6. to generate the forecasts Notice that the Graph view now includes forecast components and the Forecast Report view includes the forecasts and information about how they were generated Select Total gt Muffins gt Stuff Mart Notice that both views are immediately updated to match your current selection For this example we used expert selection to create the forecasts Expert selection can be thought of as an automatic pilot It analyzes your data statistically to determine the best forecasting technique to use and then proceeds to build the forecasts Expert selection begins by running a series of statistical tests on the data The results of these tests are run through a rule based logic system At times this logic system will directly select an appropriate forecasting method At other times the rule based logic will narrow down the potential forecasting methods that could be used without producing a clear winner In these instances expert selection will use an out of sample test to select between the competing models The Expert Analysis section of the Forecast Report documents how Forecast Pro Unlimited makes its decision In our example the rule based logic was 26 The Basics inconclusive but narrowed down the choices to either an exponential smoothing model or a Box Jenkins model An out of sample test was then used to choose between these two candidates Notice that the expert system acts in much the same way as an expert st
7. Return to the Components tab of the Graph Settings dialog box select Al and click Apply Then move to the Layout tab The tab allows you to select the graph style you wish to display and choose custom line colors and widths Experiment with the settings After you are comfortable with their operation edit the settings so they match the ones shown above and click OK Overriding the Forecasts There will undoubtedly be times when you want to judgmentally override the statistical forecasts For instance you may know of a large incoming order and need to change a number or two Forecast Pro Unlimited allows you to make these changes quickly and easily Overriding the Forecasts 31 Click the green Override Forecasts icon or select View gt Overrides from the menu Your display should look like the one below SS Forecast Pro Unlimited 64 bit Project03 File Settings Opera Project View Win 06056664 TTT Stuff Mar gt through il i OAT 12 11 Forecast 34 993 38 380 89612 101 312 64811 144 767 79 589 53 013 50 435 38975 30107 42674 Food King en Percent 10 Increment 1 Value 34 993 Overdel X Hep Cakes ES Project03 Graph ol Giles 123 Bakery Inc Stuff Mart Customer The Override view provides several different ways to override the statistical forecasts You can enter values in individual override cells you can select a range of cells and use
8. This exercise was designed to provide an introduction to super projects Setting up and maintaining super projects is reasonably complex so if you are planning on using super projects you should read the Working With Super Projects chapter of the Reference section of this manual carefully Business Forecast Systems and Forecast Pro distributors also offer consulting services to help you establish your forecasting process Exit Forecast Pro Unlimited This concludes Lesson 4 54 Collaborating With Colleagues Lesson 5 Pareto Analysis and Report Filtering Pareto analysis is used to assign ABC classifications to your forecast items Typically important high volume items are categorized as type A medium volume items are categorized as type B and slow moving items are categorized as type C Thus the code indicates the relative importance of an item and many organizations adopt different procedures for creating reviewing and monitoring their forecasts based upon the codes Forecast Pro Unlimited can automatically assign items into ABC categories based upon their volume In this lesson we will explore how this is done and also illustrate how sorting and filtering reports on the Pareto output can be extremely useful Defining Pareto Classifications Within Forecast Pro Start Forecast Pro Unlimited select File gt Open and open the project Tutorial 5 This project contains forecasts for the muffins and cakes data tha
9. 4 4 5 Helper xis ACME Hardware XLS Airline xls Beer Events xls Beer xls GiveAway xls Hardware CAN XLS Hardware MEX XLS Hardware USA XLS Home Electronic Product x Home Sales xl Illinois Employment xis M data Annual xls M data Monthly xis M data Quarterly xls Minty Fresh Mouthwash XLS New Product Data xls Cancel Help Ic Users Public Documents F orecast Pro Uniimited Input Browse The dialog box consists of the script area and the data list box You can use the vertical scroll bar to see other lines of the script The data list box displays the currently available data files or ODBC tables If you double click a filename or table name in the box the text is transferred to the currently selected script line Defining the Hierarchy Product data can almost always be organized into several levels of aggregation Suppose that an SKU Stock Keeping Unit consists of a size and color of a shoe in a certain style These are the items of importance for production and inventory control The corporation might aggregate these SKU s first into styles and then into style lines for marketing and sales These might be aggregated further into geographical regions for the benefit of top management Forecast Pro Unlimited allows you to define product hierarchies and create one set of self consistent forecasts It allows top down or bottom up reconciliation seasonal adjustment based upon aggregate data and mode
10. Forecast Pro Unlimited can save six different types of output Forecast Projects allow you to save your forecasting session so that you can return later and pick up where you left off or to share the session with others The forecast project saves the data forecasts overrides Hot List modifiers etc as they currently exist in memory If you update your input data files after saving a project when you reopen the project you ll have the option of either generating new forecasts using the updated data or restoring the conditions present when the project was saved 1 e not recalculating the forecasts using the new data Numeric Output Files can contain time series output such as history forecasts fitted values and confidence limits as well as statistical output such as the forecasting model specification and summary statistics These files can be saved in text spreadsheet ODBC or XML formats You can include output for either all items forecasted or just for the Hot List Generally speaking if you will be importing the forecasts into another application these are the files you will want to use Formatted Forecast Reports can be saved to Excel You can save these reports for the currently displayed item all items on the Hot List or all items forecasted The Excel workbook will include a separate worksheet for each 135 item containing a graph optional and the on screen Forecast Report These reports are convenient if you wish to pre
11. 12 for monthly data 4 for quarterly data etc For data that is not calendar oriented use 1 Note that most weekly corporate calendars involve occasional years of 53 weeks these occurrences will cause the forecast date tags to be off by a week Periods per cycle The number of periods per seasonal cycle usually equal to the number of periods per year An exception might be daily data where periods per cycle could be set to 7 to capture weekly patterns and periods per year set to 365 Or if weekend days are excluded periods per cycle might be 5 and periods per year 260 For nonseasonal data periods per cycle should be 1 This is a critical entry because Forecast Pro Unlimited uses it for seasonal adjustments Selecting a Data Format The program accepts three different data formats Text MLT CSV Spreadsheet XLS XLSX WK amp CSV and Open Database Connectivity ODBC Examples of each file type are shipped with the program Which data format you choose will depend on your application and database operations Before making your choice you should be aware of the following advantages and disadvantages of each file type Spreadsheet XLS XLSX WK amp CSV files Uses Excel and Lotus format spreadsheets or CSV Comma Separated Values files saved from Excel to hold data You can make and forecast multiple spreadsheet files on one script if you wish PROS If you are comfortable using a spreadsheet then the spreadsheet format
12. B Use the automatic fitting Box Jenkins model Box lrkns Mode Sting O O Model Type Conca Heb Model gt Box Jenkins gt Custom 4RIMA p d q Use a non seasonal Box Jenkins model with model orders p d and q Model gt Box Jenkins gt Custom ARIMA p d q P D Q Use a seasonal Box Jenkins model with model orders p d q P D and Q Model gt Box Jenkins gt Custom CONST Include a constant intercept in the Box Jenkins model Discrete Data Model gt Discrete DISCRETE Use a simple exponential smoothing model and base confidence limits on one of the discrete distributions Poisson or Model Specification Modifiers 151 negative binomial This option is used to obtain better estimates of the confidence limits for low volume integer series typically with many zeros Intermittent Data Model gt Intermittent VNTER Use the Croston s intermittent data model Very Simple Models Several of the menu options available under Model gt Very Simple Models invoke the dialog box below Very Simple Models a e san Simple Moving Average 3 gt Number of Terms Automatic Same as last year plus Fixed forecast value ETE Model gt Very Simple Models gt Simple Moving Average SMA n Use an n term simple moving average If the Automatic option is selected Forecast Pro Unlimited will choose the number of terms to use and the forecast modifier will be displayed as SMA Model gt Very Simple Mod
13. If this switch is on Forecast Pro Unlimited will automatically include a group total for each data file listed on the script Including or not including a group total for the data files will yield different hierarchies on the Navigator Text file encoding Specify the format to use when writing two byte characters to text files This option is only of relevance if your data or scripts utilize non ASCII characters Non Latin based languages such as Japanese Chinese Russian Arabic etc use non ASCII characters Code page Specify the Windows code page to use when text file encoding is set to multi byte The code page specifies the character set to use when writing a multi byte text file Most code pages are designed to support a specific language Display Precision Numeric Specify the precision 1 e number of decimal places to use when displaying time series data in the view windows Display Precision Percentage Specify the precision 1 e number of decimal places to use when displaying percentages in the view windows Menu Items and Dialog Boxes 185 Options me s Basic Formats Outliers Ovenides Command Line Pareto Analysis Advanced Controls None Sensitivity std deviations Detection only Maximum iterations OK J Cancel Help The Outliers tab is used to specify whether or not to detect and or correct outliers It also allows you to set the sensitivity settings for outlier detection and
14. Save Project Saves the active forecast project Copy Copies the current selection to the Windows clipboard Paste Inserts the contents of the Windows clipboard into the current insertion point Script Accesses the Define Script dialog box allowing you to edit the current script Read Data Reads in the data listed on the current script from its primary source Forecast Executes the current script file and creates the forecasts This option is only available when a script has been defined and the data have been read View Forecast Report Opens and closes the Forecast Report view View Graph Opens and closes the Graph view Override Forecasts Opens and closes the Override view allowing you to adjust the forecasts for the current selection View Item Report Opens and closes the Item Report view View Override Report Opens and closes the Override Report view View Outlier Report Opens and closes the Outlier Report view Preview Numeric Output Opens and closes the Preview Numeric Output view This view previews the contents and format of the Numeric Output file 164 Command Reference Save Formatted Forecast Report Allows you to save Formatted Forecast Reports to disk The Excel file will contain a report for every item forecasted You can save Formatted Forecast Reports for the items on the current Hot List only using the Hot List s context menu Save Numeric Output Allows you to save a Numeric Output file to
15. Stuff Mart APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 6 763 7 661 9 561 6 076 6 Total Muffins Stuff Mart OAT 12 11 CASE 12 count Oatmeal Muffins 2007 1 12 12 21 042 0 0 0 7 Total Muffins Sids Club COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 8 Total Muffins Sids Club BRA 12 11 CASE 12 count Bran Muffins 2007 1 12 12 3 572 4 000 2 808 5 184 9 Total Muffins Sids Club BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 15 307 1 866 3 477 6 501 10 Total Muffins Sids Club APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 25 404 450 906 4 986 11 Total Muffins Grocery Land COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 12 Total Muffins Grocery Land BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 7 383 6 512 4 375 3 165 13 Total Muffins Grocery Land APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 21 729 13 780 9 072 6 652 14 Total Muffins Food King COR 12 11CASE 12 count Corn Muffins 2007 1 12 12 15 Total Muffins Food King BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 16 Total Muffins Food King APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 17 Total Cakes Stuff Mart VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 0 840 18480 15 120 18 Total Cakes Stuff Mart ST 20 02 CASE 20 oz Strawberry Pound Cake 2007 1 12 12 1 563 1 143 1 767 1 351 19 Total Cakes Stuff Mart LF 20 02 CASE 20 oz Low Fat Pound Cake 2007 1 12 12 824 2 494 1 767 2 700 20 Total Cakes Stuff Mart LE 20 02 CASE 20 oz
16. This can also be accomplished using the appropriate green or yellow icon View gt Toolbar View gt Toolbar displays and hides the Toolbar which includes buttons for some of the most common commands in Forecast Pro Unlimited A check mark appears next to the menu item when the Toolbar is displayed View gt Status Bar View gt Status Bar displays and hides the Status Bar which describes the progress of the currently running forecast job or the action to be executed by the selected menu item or depressed toolbar button A check mark appears next to the menu item when the Status Bar is displayed View gt Modifiers View gt Modifiers displays and hides the currently selected forecast modifiers on the Navigator View gt Filters View gt Apply Filters toggles on and off the filter mode on the Item Report the Outlier Report and the Override Report This can also be accomplished using the blue Filter icon 196 Command Reference The Window Menu The Window menu enables you to arrange your open windows in various ways Window gt Cascade Window gt Cascade arranges all nonminimized windows in an overlapped fashion WindowsTile Window gt Tile arranges all nonminimized windows in a tiled nonoverlapped fashion The Help Menu Forecast Pro Unlimited includes extensive on line help Help gt Help Topics Help gt Help Topics displays an index of all of the help topics available Clicking on an entry will jump to the selected
17. Using the event manager is incompatible with defining helper variables on the script This option allows you to disable the event manager thereby providing backwards compatibility for projects that define helper variables on the script Check for product updates automatically If this option is selected Forecast Pro Unlimited will periodically check online for product updates and alert you if they are available If your support and maintenance contract is up to date product updates are free The Operations Menu The operations menu is used to perform basic program operations Most of the actions can also be performed via icons Operations gt ODBC Connect Operations gt ODBC Connect is used to connect to an ODBC database After selecting this option you will be prompted for the type of database and the database file This option is only available when the data mode is set to ODBC Operations gt Script Operations gt Script accesses the Define Script dialog box allowing you to edit the current script This dialog box can also be accessed via the red Script icon Please read the chapter entitled Defining the Script for complete details on the script Operations gt Read Data Operations gt Read Data reads in the data listed on the current script from its primary source This task can also be accomplished using the red Read Data icon p 192 Command Reference Operations gt Forecast Operations gt Forecast executes the cur
18. allows you to create update and manipulate your data in a familiar environment Processing time for xls files is faster than for ODBC Creating forecast reports from Excel is straightforward CONS The layout of your spreadsheet must follow the Forecast Pro Unlimited rules You may have to change your current spreadsheet layout to Selecting a Data Format 117 one you find slightly less convenient Processing time for xlsx files can be Slow xls is faster and csv is faster still Text CSV MLT files Uses text files to hold data You can make and forecast multiple text files on one script if you wish PROS Processing time is faster than for ODBC and spreadsheets excluding CSV which is text based Most databases can output text files CONS Editing viewing and updating large MLT files can be clumsy Not all editors accept very long files ODBC Open database connectivity ODBC allows Forecast Pro Unlimited to read and write data directly to databases for which an ODBC driver exists Most popular databases support ODBC including Access Oracle and SQL server PROS ODBC can provide direct access to data stored in the corporate database obviating the need for intermediate files CONS Reading and writing directly to the corporate database can raise security issues Data transfer can be slow for some configurations The next three sections supply the details you need to set up your data in one of the Forecast Pro Unlimited form
19. gt uT Ma 5 W55 36 745 69 23 071 52 11 233 73 14 142 66 COR 12 11 FA ee 5 E Numeric Output n mrm he S UNIA tput Design 35 246 22 10 972 77 10 792 16 6 564 45 12 DO 23 851 00 18 082 00 19 127 00 20 482 00 O PHN Output Format Time Series Data Model and Statistics APP 12 11 9 825 67 7 068 69 7 29236 8 178 07 OAT 12 11 Output Layout B9 39 098 25 20 393 74 4 567 44 1 068 15 Sids Club ara ro ars B 7 05028 7 050 28 7 050 28 7 050 28 COR 12 11 iB 7 689 58 7 690 36 7 690 58 7 690 64 BRA 12 11 Orientation i 16 093 33 10 537 60 5 553 18 5 839 08 BLU 12 11 gt J Heading Period I 0 14 653 59 19 547 83 8 590 81 6 993 20 E APP 12 11 i gt L anemian i SEEEN ee I 10 744 28 7 396 66 6 679 80 7 836 08 eigen Seve aiii j rak 2 8 017 03 4 007 41 3 981 86 4 060 51 BLU 12 11 Exclude endtems 10 248 27 5 380 30 458489 7 664 24 APP 12 11 T Singe output fle o 35 900 78 32 652 18 29 618 46 11 609 61 3 Food King i D2 25 727 74 10 680 95 15 668 70 20 171 74 COR 12 11 i Y Break record up into ines gt BO 16 285 30 16 285 30 16 285 30 16 285 30 BLU 12 11 BB 10 141 75 7 134 37 5 267 31 12 546 79 i APP 12 11 i z 1 914 44 1 914 44 1 914 44 1 914 44 Cakes z B 4 594 96 5 394 88 3 613 00 4 855 89 yo l 3 378 83 3 162 30 2 866 00 3 661 39 a va mm E 5 2249 39 251396 1 709 51 2 627 06 AS 14 22363 11 451 83 9 475 05 16 625 20 ee os 10 499 85 8621 23 6 331 71 13
20. implement and maintain than one that uses a super project If it is not essential that your total hierarchy be broken out into smaller pieces then sequential review of stand alone projects is the preferred approach Sharing a Stand alone Project In this lesson we will open a forecast project that was created by someone else review their work and make some overrides Providing a colleague access to your forecast project is a simple way to share your work As long as your colleague has Forecast Pro Unlimited Forecaster license or Collaborator license he or she can open the project and continue the session To illustrate how to share a project we ll open up a project that is included with Forecast Pro Unlimited Start Forecast Pro Unlimited select File gt Open and open the project Tutorial 4 part 1 The data in this project represent sales of different types of cameras and film 48 Collaborating With Colleagues E5 Forecast Pro Unlimited 64 bit Tutorial 4 part 1 A ON eca _x_ File Settings aa View Window OGG C6 OS lt b OC O4 F 6 OO WS through 2012 gt 2 Holdout 0 Total E Ta rial 4 part 1 Forecast overrides pe lt a sare re a ERTE taasan T if r T Ban ASA100_BW 7 970 6648 11936 7 655 6585 11 291 10918 11956 7 664 4 4 Increment 1 Value 8 152 John Ready Notice that we did not define a script read the data or click
21. t EGGE aeaaaasaaaa 2 amp hh g g 2 DCS SLP 3 ae O o o a a aa eo zF Muffins Muffin AAA AAA MAMAS rgQg2g22222eQ al gt al gt al gt gt Grocery Land ins gt Grocery Land gt COR 12 11 Gennes band s OIII The Items tab allows you to choose up to five variables you want to graph The Override Forecasts View The override view is used to enter overrides to the statistically generated forecasts Changes made at any level of the forecasting hierarchy will 172 Command Reference automatically reconcile all levels Refer to the Reconciliation Modifiers section of the Using Forecast Modifiers chapter for a discussion on how the reconciliation is accomplished Up to ten override rows can be used and you can adjust the forecasts using percentages increments or by typing in new values You can also enter comments for any cell on the display There is an Overrides tab on the Settings gt Options dialog box that allows you to control the document level options including how overrides should be applied replacement values vs incremental adjustments and the precision of the display This tab is fully documented in the Menu Items and Dialog Boxes section of this Command Reference chapter SS reee Eo P es Gh n 4 ee File Settings Oaai Ono 060505664 068 Oane 0028 COR 12 11 2007 1 aber 2012 gt Holdout 0 Total Muffin Stuff Mart COR 12 11 eres COR 12 11 St
22. 12 and generated 78 forecasts for each method Based on the lower MAD will use Exponential Smoothing Model Detail Nene Warning displayed forecasts represent bottom up adjusted values not actual forecasts using the model shown Expert selection Exponential smoothing No trend Multiplicative seasonality NM 0 125 0 327 Confidence limits proportional to indexes and level Component Smoothing Wot 0 1249 You are currently looking at a standard format Forecast Report The Forecast Report can be customized and can include up to nine sections They are Viewing the Forecast Report 27 Expert Analysis documents the logic behind the expert selection s decision This section will be omitted if a user specified forecasting model is used Model Details documents the specific forecasting model that was used to generate the forecasts Within Sample Statistics provides a set of standardized model statistics that can be used to diagnose the current model as well as to compare and contrast alternative forecasting approaches Historic Data not currently active lists the history and fitted values along with some aggregated totals and summary statistics Forecast Data lists the forecasts and confidence limits along with some aggregated totals and summary statistics Safety stocks not currently active lists the safety stocks for different lead times along with the demand during lead time and reorder point Out of Sampl
23. 921 64 Stuff Mart BU 20 02 Point forecasts CASE 20 oz Butter Pound Cake 5 213 17 4 882 29 7 287 90 4 063 00 4 292 63 6 301 40 5 220 16 4 425 19 4 604 97 s Sids Club VA 20 01 Point forecasts CASE 20 oz Vanila Layer Cake 6 146 20 6 429 32 653942 4 852 78 3 87267 5 253 17 460158 3 838 98 4 465 63 akes Sids Club LF 20 02 Point forecasts CASE 20 oz Low Fat Pound Cake 10 598 52 10 939 82 11 049 64 9 267 02 10 211 38 14 147 65 7 242 34 12 553 38 19 766 10 Le s gt aa gt OAT 12 11 otal Cakes Sids Club CO 20 01 Point forecasts CASE 20 oz Coconut Layer Cake 8 149 59 9 254 07 9 023 54 6 467 82 5 711 87 6 74463 6 528 81 5 449 08 6 093 07 Total gt Muffins gt Sids Gub gt COR 12 11 ota akes Sids Club CH 20 01 Point forecasts CASE 20 oz Chocolate Layer Cake 6 020 59 5 302 97 5 834 11 6 139 07 484295 606636 3 303 77 3 149 82 6 826 52 Total gt Muffins gt Sids Olub gt BRA 12 11 Total gt Muffins gt Sids Club gt BLU T2 1 Sids Club CA 20 01 Point forecasts CASE 20 oz Carrot Layer Cake 7 201 53 8 412 32 8 956 05 653785 536570 6 661 13 6 782 65 585868 6 578 33 m The Output Format tab is used to specify the basic layout for the Numeric Output file Forecast file prefix Specify the character s to use as the default prefix when naming the Numeric Output file If the Single Output file option is selected in the Layout section the default Numeric Output filename will be the prefix followed by the project name f
24. Forecast Pro Unlimited Interface 167 The Export to option allows you to export the current Hot List to Excel The ability to import and export Hot Lists to Excel allows you to create multiple Hot Lists for a project and switch amongst them View Windows There are seven view windows available in Forecast Pro Unlimited Three of them Forecast Report Graph and Override Forecasts are context specific meaning that the contents displayed in these windows will match the current Navigator selection and update automatically as you move about the Navigator The context specific views all have green icons The remaining four views Item Report Override Report Outlier Report and Preview Numeric Output are global 1 e their contents pertain to all items forecasted and are independent of the current Navigator selection The global views all have yellow icons A description of each of the views appears below The Status bar As you use Forecast Pro Unlimited the status bar displays relevant information The Forecast Report View The Forecast Report view is a scrollable text display containing information about the forecasts and how they were generated In addition to providing a convenient way to view information while using Forecast Pro Unlimited the Forecast Report view is also used to design the text section of the formatted forecast reports that are output to Excel The Forecast Report Design dialog box allows you to customize the F
25. Lemon Pound Cake 2007 1 12 12 1 351 1 975 1 767 3 118 21 Total Cakes Stuff Mart CO 20 01 CASE 20 oz Coconut Layer Cake 2007 1 12 12 0 0 4 368 3 360 22 Total Cakes Stuff Mart CH 20 01 CASE 20 oz Chocolate Layer Cake 2007 1 12 12 0 0 9 240 9 240 23 Total Cakes Stuff Mart CA 20 01 CASE 20 oz Carrot Layer Cake 2007 1 12 12 0 O 14280 11 760 24 Total Cakes Stuff Mart BU 20 02 CASE 20 oz Butter Pound Cake 2007 1 12 12 5 715 1 035 2 595 5 190 25 Total Cakes Sids Club VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 12 061 9 072 10 872 15 840 1 26 Total Cakes Sids Club LF 20 02 CASE 20 oz Low Fat Pound Cake 2007 1 12 12 27 Total Cakes Sids Club CO 20 01 CASE 20 oz Coconut Layer Cake 2007 1 12 12 20 196 12672 18144 24192 2 28 Total Cakes Sids Club CH 20 01 CASE 20 oz Chocolate Layer Cake 2007 1 12 12 29 Total Cakes Sids Club CA 20 01 CASE 20 oz Carrot Layer Cake 2007 1 12 12 8 964 6 480 7 920 12 672 1 30 Total Cakes Sids Club BU 20 02 CASE 20 oz Butter Pound Cake 2007 1 12 12 31 Total Cakes Grocery Land VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 32 Total Cakes Grocery Land LF 20 02 CASE 20 oz Low Fat Pound Cake 2007 1 12 12 1 479 2 474 3 271 1 664 33 Total Cakes Grocery Land LE 20 02 CASE 20 oz Lemon Pound Cake 2007 1 12 12 2 030 3 325 4 073 2 463 a aut at eae G a sane no on a as nao z ja PYN ao DIAA Orr arr rrr Si Ready gog 110 In our example our first attribute field is Total Notice that the value
26. Script icon 9 161 Select Operations gt Read Data Forecast Pro Unlimited will then read the data from disk into RAM and display the starting and ending dates for the forecast run on the dialog bar Select Operations gt Forecast The program will then execute the script to prepare the forecasts The forecasts are retained in memory and support the following optional steps Select View gt Overrides to adjust the forecasts and if appropriate reconcile them across multiple levels Select View gt Forecast Report to obtain text reports about individual forecasts Select View gt Graph to view the forecasts graphically Select Project gt Export gt Full Numeric Output to save them to disk or to your database via ODBC The remaining sections of this chapter document this procedure as well as all other options in more detail The Forecast Pro Unlimited Interface This section describes the Forecast Pro Unlimited interface 162 Command Reference menu bar gt toolbar gt dialog bar gt Navigator gt Hot List gt status bar gt File Settings Operations Project View 0605066 COR 12 11 Stuff Mart COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 Grocery Land COR 12 11 BLU 12 11 APP 12 11 Food King COR 12 11 BLU 12 11 APP 12 11 3J Cakes Stuff Mart VA 20 01 ST 20 02 COR
27. THE DOCUMENTATION AND ANY OTHER MATERIALS WHETHER EXPRESS IMPLIED STATUTORY OR OTHERWISE INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR COURSE OF PERFORMANCE BFS EXPLICITLY DOES NOT WARRANT THAT THE SOFTWARE WILL MEET ALL OF YOUR REQUIREMENTS OR THAT THE OPERATION OF THE SOFTWARE WILL BE ERROR FREE YOU ACKNOWLEDGE THAT YOU HAVE RELIED ON NO WARRANTIES AND NO WARRANTIES ARE MADE HEREIN BY BFS 7 LIMITATION OF LIABILITY BFS SHALL NOT BE LIABLE FOR ANY LOSS OR DAMAGE THAT MAY BE RELATED TO THE FURNISHING PERFORMANCE OR USE OF THE SOFTWARE INCLUDING WITHOUT LIMITATION ANY INDIRECT SPECIAL INCIDENTAL ECONOMIC LOST PROFIT OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER EVEN IF BFS HAS BEEN ADVISED OF THE POSSIBILITY OF THOSE DAMAGES IN NO EVENT SHALL BFS S LIABILITY UNDER THIS EULA EXCEED THE AMOUNT PAID FOR THE SOFTWARE LICENSE IF ANY End user License Agreement 217 8 TERM AND TERMINATION This EULA is effective until terminated Your rights under this EULA will terminate automatically without notice from BFS if You fail to comply with any provision of this EULA Upon termination of this EULA You must destroy all copies full or partial of the Software You agree that upon termination of this EULA for any reason BFS may take actions so that Software no longer operates 9 GENERAL TERMS AND CONDITI
28. The format and content of these files will match the current project s settings Make sure your settings match the ones above Click the OK button to save your selections Click the red Script icon and define a script consisting of the single line 123 Bakery 108 Operating From the Command Line Click OK to accept the script and then select File gt Save to save the project Name the project Test Exit Forecast Pro Unlimited We will now run the project from the command line You can execute a command line using the Search box on the Windows Start Menu or using the Windows Run command Execute the program including Test FPZip as a parameter followed by b If you installed Forecast Pro Unlimited into a directory named C Program Files Forecast Pro Unlimited v8 the command line should read including the quotation marks C Program Files Forecast Pro Unlimited v8 ForecastProUnlimited exe Test FPZip b After issuing the command the program will execute the script and create all of the requested output files Examine your output directory to confirm the files were created For more detailed information regarding command line operation consult the Reference section of this manual This concludes Lesson 12 Command line Operation 109 REFERENCE Chapter 1 Setting Up Your Data Forecast Pro Unlimited requires historic data to be input in a specific format For many users the data format is an initial st
29. aan Insert Delete Format 2 Cen Sona ne pboard Alignment Editing x50 X f v A B c D E F G H l J K L M N oF 1 Total Category Customer SKU Modifier 2 Total Cakes NULL NULL TOPDOWN WINTERS 3 Total Muffins Stuff Mart COR 12 11 LEADTIME 1 4 Total Muffins Stuff Mart BRA 12 11 LEADTIME 1 5 Total Muffins Stuff Mart BLU 12 11 LEADTIME 1 BJ 6 Total Muffins Stuff Mart APP 12 11 LEADTIME 1 7 Total Muffins Stuff Mart OAT 12 11 LEADTIME 2 8 Total Muffins Sids Club BRA 12 11 SIMPLE Total Muffins Grocery Land COR 12 11 LEADTIME 1 10 Total Muffins Food King APP 12 11 OUTLIER CORRECT 11 Total Cakes Stuff Mart VA 20 01 LEADTIME 2 12 Total Cakes Stuff Mart ST 20 02 LEADTIME 2 13 Total Cakes Stuff Mart LF 20 02 LEADTIME 2 14 Total Cakes Grocery Land VA 20 01 OUTLIER CORRECT 15 Total Cakes Food King VA 20 01 LEADTIME 3 16 Total Cakes Food King LF 20 02 LEADTIME 3 17 Total Cakes Food King BU 20 02 LEADTIME 2 18 19 The first columns A through D in our example define the attributes and name of the item 1 e the hierarchy information The next column defines the modifier s to import Formatting rules A header row is required The Modifier field must be present and labeled accordingly The modifiers can be assigned at any level Multiple modifiers can be assigned in a single cell If an item has no modifiers it does not need to be included in the spreadsheet Modifier Files 133 Chapter 2 Saving Your Work
30. can use the outlier report as the equivalent of a Hot List to navigate through the listed items All of the global report views yellow icon views support this kind of navigation Notice that the graph is displaying both the actual history for December 2007 and the suggested correction The data point is rather unusual and you can see that the forecast has a small spike in December which is being driven by the outlier Right click the item on the Navigator not the outlier report to bring up the Navigator s context menu Select Outliers gt Correct Notice that the status in the outlier report has changed to Corrected and that correcting for this outlier has changed the shape of the forecasts Double click on the next item on the outlier report Here too we have a fairly significant outlier and will want to correct for it Examine the remaining items on the Hot List and experiment with the Outlier options on the Navigator s context menu When you are comfortable with their operation exit the program This concludes Lesson 10 Correcting the Outliers 99 Lesson 11 Out of sample Testing A good deal of the empirical knowledge about forecasting has come from comparisons of different methodologies The M Competition Makridakis et al 1982 and M 3 Competition Makridakis and Hibon 2000 are the largest and most famous of these comparisons Forecast Pro participated in the M 3 competition and outperformed all other software entran
31. data forecast the data open the graph view and fully expand the Navigator Right click HE No data on the Navigator to invoke the context menu and then select Model gt Bass Diffusion In this example we have no historic data so we will need to specify the Coefficient of Innovation the Coefficient of Imitation and the Potential Market The coefficients could be set using values from an analogous product s model There is also a considerable body of literature on the Bass model including published coefficients for different types of technology Consult the Forecast Pro Statistical Reference Manual for details Bass Diffusion Model Settings T Coefficient of Innovation p 05 Coefficient of Imitation q 41 Initial Total m 1000000 t Cancel Help The example we are working with is a home electronic device Our market research suggests the total market is 1 million units A similar product had Using the Bass Model 87 coefficients of innovation and imitation of 0 05 and 0 41 respectively Edit the settings to match the ones above and click OK to build the model The graph shows the forecasts growing for the first eight years and then starting to decline If you were to graph the forecasts on a cumulative basis for example in Excel the cumulative forecasts will resemble an elongated S This characteristic shape is why the Bass model is often referred to as an S curve model Right click HE 6 years on the Navigator to i
32. disk The file will contain output for every item forecasted You can save a Numeric Output file for the items on the current Hot List only using the Hot List s context menu AA Apply Filters Turns on and off report filtering mode Filtering mode allows you to filter and sort the item override and outlier reports ys Options Opens the Options dialog box allowing you to change the settings for the current forecast project The Dialog bar The dialog bar is used to display the current script line to set the span of the data and to define a holdout sample Defining the fit set All time series methods begin by fitting the coefficients of a model to historic data You can alter the beginning year and beginning period to specify the first point of the fitting sample and or the ending year and ending period to specify the last point The dialog bar automatically selects the largest fit set for which data exists Normally you will want to accept the defaults However you may want to ignore earlier data if you distrust their relevance Defining a holdout sample Edit the holdout sample box to specify a number of data points to be withheld from the end of your data set If you withhold 2 or more points Forecast Pro Unlimited automatically generates out of sample evaluation statistics for any models that you build If you do not want to perform out of sample testing set the holdout sample to zero The Forecast Pro Unlimited Interface 16
33. effects Example I A product line consisting of aggregated SKU s is promoted as a unit You believe that all the SKU s in the product line will be affected similarly You can deal with this by using the following approach LINE EVENT _PROMO TOPDOWN SKUI SKU2 SKU3 This causes Forecast Pro Unlimited to execute the following procedure Forecast the group LINE taking promotions into account Forecast the SKU s without taking promotions into account Adjust the SKU forecasts so that they sum to the LINE forecasts This propagates the group level promotional effects to the SKU s Example 2 Now suppose that only one SKU of the group is promoted The following approach can account for this promotion LINE SKU 1 EVENT _PROMO SKU2 SKU3 This causes Forecast Pro Unlimited to forecast the SKU s individually It then sums these forecasts to obtain forecasts for the group LINE What if you were to add the keyword TOPDOWN to the group LINE in this example The effect would be that the promotion of SKU1 affects it but does not affect overall sales at the group level This might be the case if the Combining Multiple Level and Event Adjustment Models 77 promotion affected sales only by cannibalizing other SKU s in the group This is a dubious effect It is usually better to prepare forecasts bottom up when there are distinct models for the lower level units Short lived Products A manufacturer often maintains a product line for a lon
34. everyone involved understands their role in establishing the final numbers Some of the more important questions to answer before you start include What output is required and what format should it be in 43 What naming conventions should be used for data files output files and forecast projects where should these files be kept and how will they be backed up Who is authorized to enter forecast overrides and at what level s are they entered What are the steps required to update our forecasts each planning period Depending on the complexity of your forecasting process and the number of individuals involved it may be useful to document the decisions made and the steps required to update the forecasts each planning period Step One Updating Your Data Files Consider the following situation It is early June 2012 and we have historic demand data that starts in 1 2007 and ends in 5 2012 Thus our first forecast period will be June 2012 We use Forecast Pro Unlimited to create our forecasts and then we save a forecast project named Tutorial 3 June 2012 Now imagine that a month passes by We now have our sales figures for June and we update our historic data files This is accomplished externally to Forecast Pro Unlimited It may entail running a data extraction routine to generate the new files updating your spreadsheets by hand or some other process to update the historical data files Step Two Opening Your Foreca
35. explanatory However we have noted some details below Model Properties The model properties drop down box contains a number of different fields that describe the forecasting model selected Model Specification is a concise description of the model used The notation that is used here is also used on the Forecast Report Consult the Forecast Pro Statistical Reference Manual for further details Transform The Box Cox transformation power 1 indicates no transform 5 the square root and 0 the natural log The Event Manager The Event Manager is used to create and modify event schedules This section documents the options available on the Event Manager dialog boxes If you are new to event modeling it is strongly recommended that you work your way through Building Event Models in the tutorial section of this manual The Event Manager works in conjunction with the graph view and can only be accessed when the graph view is open You invoke the Event Manager by selecting Manage events on the graph view s context menu The Event Manager 179 Manage Events Isl Date 2012 Nov ea aaa Edit Date Description Event Code Status 2010 Sep Union Strike 3 2011 Jun Price Promotion 1 2011 Nov Coupon Promotion 2 2012 Apr Price Promotion 2012 Nov Coupon Promotion 2 2013 Apr Price Promotion Pending Show all periods Help Schedule _Schedule01 X Commit 5 The Manage Events dialog box is shown above The Date dropdown contro
36. explanatory The Cumulative field displays the percentage of total volume for the current item plus all higher ranked items Scroll through the display and examine the output Notice that the Cumulative for the item ranked 25 is the first one to exceed 80 and that therefore the item ranked 26 1s classified as a B Click on the filter dropdown for Pareto column set the filter to only display type A and click OK Examine the filtered report Double click on the top ranked item on the report and then double click on the item ranked second Notice that the Navigator immediately jumps to the selected item The ability to sort filter and navigate by double clicking on items can be very convenient when reviewing your forecasts Experiment with the Pareto and filtering options until you are comfortable with their operation When you are finished exit the program without saving changes to the Tutorial 5 project This concludes Lesson 5 58 Pareto Analysis and Report Filtering Lesson 6 Building Event Models Event adjustment models extend exponential smoothing by allowing you to adjust for events like sales promotions strikes or simply for unexplained outliers You can adjust for events of several different types These could be promotions of different types or sizes or different calendar effects like Easter and Independence Day weeks Forecast Pro Unlimited knows these occurrences simply as events of types 1 2 etc Event adjustment
37. finally click the green View Graph icon and use the Navigator to display a graph of SKU087 ES Forecast Pro Unlimited 64 bit ProjectO1 So x pie Settings lOprations Project View Window Help 666 56 6646 0 64 Owe SKU087 2011 1 2 R 1 through 2013 gt 1 Holdout 0 SKU087 2 Orange Square Tub with Lid SKU087 Ready SKU087 represents monthly sales of a plastic storage container that is sold along with other storage products via in home sales parties The most notable feature in the data is the large peak in January of 2013 One of the marketing strategies that this firm uses is to provide everyone who attends an in home party with a free gift In January of 2013 SKU087 was the free gift Thus the volume associated with this period represents not only sales of the SKU but also the number provided free of charge 60 Building Event Models Let s begin by modeling SKU087 using expert selection Click the red Forecast icon Include the fitted values on the graph This is accomplished by toggling on Fitted on the graph s context menu ES Forecast Pro Unlimited 64 bit ProjectO1 oN oN bolas File Settings Operations Project View Window Hi 00055664 0686 04 0 0006 1 gt through 2013 gt 1 SKU087 SKU087 2 Orange Square Tub with Lid Project0l Forecast Report oll 2 p Forecast Report for SKU087
38. gt BOTTLES BOTTLESI2 Commercial TOPDO KEGSHALF KEGSFULL Ihave narrowed down the choice to exponential smoothing or Box Jenkins il perform an out of sample test to select between these two approaches MAD for Exponential smoothing was 274 and for Box Jenkins was 294 e roling out of sample test used a maximum horizon of 52 and generated 1378 forecasts for each method ased on the lower MAD will use Exponential Smoothing Retail Itemld1 In the example above TOPDOWN directs Forecast Pro Unlimited to compute forecasts and confidence limits for the aggregate groups Retail and Commercial at the aggregate level The item level forecasts and confidence limits are multiplicatively adjusted so that the item level forecasts sum correctly to the group level forecasts Forecasts for Brand are obtained by bottom up aggregation of the groups Retail and Commercial Note the assumptions behind this approach We have assumed that the nested items are statistically similar so that we can obtain better forecasts of the groups Retail and Commercial by forecasting them as a unit However the forecast models for these two groups are judged as distinct compared to the irregularity Thus the best forecasts of Brand are obtained by direct aggregation of the two member groups 146 Working With Scripts and Hierarchies It would be illegal to add the modifier YTOPDOWN to the line defining BRAND unless we remove the TOPDOWN modifier
39. is included in the display Your selections under the Custom option are automatically retained for the project allowing you to switch between the Custom style and one or more of the standard styles without having to reset your custom settings Important note The Custom option allows you to set the numeric precision for the within sample statistics These precision settings are used for both Custom and standard report styles The Forecast Report View 169 The Graph View The graph view is used to display variables and forecasts graphically In addition to providing a convenient way to view the forecasts while using Forecast Pro Unlimited the graph can also be included in the formatted forecast reports that you save to Excel The format and content of the formatted forecast report s graph will match the current settings for the graph view ES Forecast Pro Unlimited 64 bit Projet04 TT LT 3 DLS eee File Settings Operations Project View Window Help COG OO 16S 40S 10 4 O O O96 COR 12 11 gt through 2012 gt 6 gt Holdout 0 z f y m 3 Total GS Projectos Graph eee Muffins Stuff Mart COR 12 11 CASE 12 count Corn Muffins COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 Grocery Land aaa 2012 Jan po i MM Forecast Interval Food King 3 COR 12 11 Project04 Forecast Report vV History Lo 8 i
40. items All of the global report views yellow icon views support this kind of navigation The content and format of the report is controlled using the Item Report Design dialog box This dialog box is invoked by selecting Settings gt Item Report Design or by selecting Item Report Design from the Item Report view s context menu The Override Report View The Override Report view lists items where overrides and or comments have been made To open the Override Report view select View gt Override Report or click the yellow View Override Report icon 44 If you double click an item on the Override Report the Navigator will jump directly to that item Thus you can use the Override Report as the equivalent of a Hot List to navigate through the listed items All of the global report views yellow icon views support this kind of navigation The content and format of the report is controlled using the Override Report view s context menu The context menu also allows you to print the currently displayed report and save it to Excel The Item Report View 175 The Outlier Report View The outlier report view lists items where outliers have been detected and or corrected To open the outlier report view select View gt Outlier Report or click the yellow View Outlier Report icon A The content and format of the report is controlled using the outlier report s context menu The context menu also allows you to print the currently displaye
41. lower than the MAPEs for the moving averages for every time horizon clear evidence that expert selection outperforms the moving averages The other comparison statistic that can be used is the GMRAE Geometric Mean of Relative Absolute Error This statistic 1s calculated using the relative error between the naive model and the currently selected model A GMRAE of 0 55 indicates that the size of the current model s error is only 55 of the size of the error generated using the naive model for the same data set In our example the GMRAEs for expert selection are lower than the GMRAESs for the moving averages further evidence that expert selection outperforms the moving averages This concludes Lesson 11 Comparing an Alternative Model 105 Lesson 12 Operating From the Command Line When the command line to execute the program includes a project file FPZip or FPProj and the b parameter Forecast Pro Unlimited will read the project create the forecasts save all output files and then exit This feature is particularly useful when you are integrating forecasting with other software systems and desire a hands off approach Command line Operation In this lesson we will first use Forecast Pro Unlimited interactively to create a project file We will then exit the program and execute the script via the command line Start Forecast Pro Unlimited and select Settings gt Options Set the data mode to XIs the forecast horizon to
42. make changes from time to time in the contents hereof without obligation of Business Forecast Systems Inc to notify any person or organization of such revision or change Trademarks Forecast Pro is a registered trademark of Business Forecast Systems Inc Other product names mentioned in this manual are trademarks or registered trademarks of their respective companies and are hereby acknowledged Contents GETTING STARTED Belore You BOO easecessssevestacavaveusvsccccecsasecsuevaecackecaaceskeacsceatesssssuseasceekstusaceutents 3 Forecasters and OlADOl ALOLS pasos a T S 3 How TO WS Tis Min l ersen tesaaceaiencnn ta oveanee 4 Statistical Reference Manual PDF only cc ceeeecessccececeeeeeeeeeeeeeeceeeaeeeees 6 Checking Your Forecast Pro Unlimited Package cc ceeeecceceeceeesseeeeeeeeees 6 What You Need to Run Forecast Pro Unlimited ec cccccccssseeeeeeeeeeeees 7 Registering Your Forecast Pro Unlimited Package ee eeccccccecessseeeeeeeeees 7 Future Development of Forecast Pro Unlimited ecceccccccceeeeseeeeeeeeeeees 7 Installing Forecast Pro Unlimited ccccccssssssssscccccccsssssssscsccccssscssssscsees 9 AWoman stalan ON ss EE A 9 Manually Installing the 32 bit or 64 bit Version ce eeeceeecceeeeeeeeeeseeeeees 10 A Quick Overview of Forecasting cccccccsssssssssscccccssssssssssccccsscssssssssees 11 What is Statistical Forecasting cas cvssvadsascacastsuvesseda
43. models work almost the same as seasonal index models In a seasonal index model each month gets its own index which is updated each time that month recurs In an event adjustment model each event type gets its own index which is updated each time an event of that particular type recurs The difference is that while January recurs every 12 months an event of type 1 usually recurs irregularly Since Forecast Pro Unlimited knows that January occurs every 12 months you don t have to provide that information To implement event adjustment however you must construct an event schedule which indicates where the events occurred historically and if applicable where they will occur during the forecast period This is accomplished either interactively using the Event Manager or you can create the event schedule outside of Forecast Pro for example in Excel and import it using Project gt Import gt Helpers from 59 For more statistical details please consult the statistical reference for exponential smoothing in the Forecast Pro Statistical Reference Manual In this lesson you will use an event models to capture the relationship between sales and promotions You will also use an event model to capture seasonal patterns in weekly data Modeling a One time Promotion Click the red Script icon 9 and create a script listing GiveAway on the first line Click OK to accept the script then click the red Read Data icon to read in the data and
44. now complete Open the Override view fully expand the Navigator and select Total gt Canada gt PG1 204 1 Working With Super Projects 53 Forecast Pro Unlimited 64 bit Super Project Example M E i Em Ee a _x_ File Settings Operations Project View Window Help 00055 664068 0 00006 PG1 204 1 gt through 2012 1 gt Holdout 0 et PG1 204 3 B PG1 204 4 PG1 204 5 Mexico gt PG1 204 1 EXSM PG1 204 2 D z p E PG1 204 3 c increment j Override Tim Commit ysHelpas PG1 204 4 PG1 204 5 3 USA PG1 204 1 533 904 833 1 183 F History gt PG1 204 2 PG1 204 3 PG1 204 4 WINTERS r PG1 204 5 Super Project Example Forecast Report Forecast Report for PG1 204 1 o 8 s Cases GFCi White Total gt Canada gt PG1 204 1 Raw hierarchy is Total gt Canada gt PG1 204 1 Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins wil perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 24 and for Box Jenkins was 119 The rolling out of sample test used a maximum horizon of 6 and generated 21 forecasts for each method PG1 204 1 Cases GFCI White Notice that our new super project combines all three countries and includes the modifiers and forecasts from the component projects
45. only the time series data but also certain header information The header information includes the following Variable name The name by which the program refers to an individual item often an SKU An item name is limited to 256 of the following characters 0 9 A Za z amp _ lt gt However you may also be limited by restrictions imposed by the software to which you export your data SQL databases for instance sometimes require that the first character in a name is a letter and do not regard upper and lower cases as distinct If the variable name begins or ends with an underbar _ Forecast Pro Unlimited tags it as a potential helper variable and will not forecast it Helper variables are used for event modeling and weighting transformations Variable description A short description of the variable Variable descriptions must not exceed 256 characters in length Variable descriptions are displayed within Forecast Pro Unlimited and can be included in Numeric Output Files and Forecast Report Files Starting year and period The year and period corresponding to the first available data point If the first available observation for a monthly series was April 2001 then the starting year would be 2001 and the starting period would 116 Setting Up Your Data be 4 The starting year must be 100 or later For data that are not calendar oriented enter 100 for the starting year and 1 for the starting period Periods per year
46. our example each data record consists of six header items in columns 1 through 6 followed by the corresponding historic data point It is important to note that each data record must contain the aggregated value for the given period The fields are defined as follows ItemId0 This is a text field containing the variable name It can be up to 256 characters Description This is a text field containing the variable description It can be up to 256 characters Hist_Year This is a number field with field size double containing the year Hist_Period This is a number field with field size double containing the period Ppy This is a number field with field size double containing the periods per year 126 Setting Up Your Data Ppc This is a number field with field size double containing the periods per cycle Hist_Value This is a number field with field size double containing the aggregated historic data value for the record s date as defined by the Hist_ Year and Hist_ Period See the Overview section at the beginning of this chapter for more details on these items To connect to an ODBC database you set the data mode to ODBC in Settings and then select Operations gt ODBC Connect You will be prompted to establish the file data source select an ODBC driver and then to select a database When you invoke the Define Script dialog box the list box to the right includes all tables from your database that do not end w
47. overview 21 Index 223 Seasonal indexes 68 Zipped projects 212 Sensitivity outlier setting 186 Settings Options 182 Short lived products 78 Simple moving average 13 Speeding up the program 211 Spreadsheet data 117 118 SQLite 191 Starting Forecast Pro Unlimited 19 Starting period 116 Starting year 116 Statistical row 173 Status bar 196 System requirements 7 Text file encoding 185 Thousands separator 184 Tile 197 Toolbar 163 196 Top down 75 Trailing zeros 184 Updates 198 Use SQLite 191 Variable description 116 header information 116 name 116 Very simple models 152 View Apply Filters 196 View Modifiers 196 View Status bar 196 View Toolbar 196 Weekly data 67 Weighting transformation 156 Window Cascade 197 Window Tile 197 Winters 68 WK 117 118 XLS 117 118 Zeros 115 224 Index
48. pi KI n fj T f VN gt A 600 UM We Y 2 JO se a ot ee WAN IN v EEEO RSE I SIEPE IESE AAA O S LEOA AE REO OELE AE L OOII OR ENS S SEEE EAE AETETETETETETETEETA FETETTTETTTETETETETETETTETETETETETETETETETETETETTTT FETETETETETETETTETETETETETETITETA FETTTTTTETETETETETA FtTATTETETETETETETITETETETTTETIN 2012 01 2013 01 2014 01 E History Hl Fitted Values ir t E Forecas t Interval I Ready The model now includes 52 seasonal indexes to capture seasonality and three event indexes to capture the summer holidays Examine the fit to the holiday weeks and notice that the event model is not missing the holidays when they move around the calendar Although we would like the seasonal indexes to capture a smooth seasonal pattern in this case they do not This is because of the low level of temporal aggregation and other problems peculiar to weekly data The year usually begins and ends with a partial week Holidays such as Easter and Independence Day do not occur in the same week each year Some years may contain 53 weeks depending upon how a week is defined Different corporations address this differently Generally speaking monthly models will more accurately capture seasonality Nevertheless many corporations must deal with weekly seasonal data because production and inventory control require it Event adjustment models can help you with some of the problems that you will face Event models allow you to control how many
49. research leads us to believe that this new product will sell 500 000 units in the first 12 months To have our forecast reflect this assumption edit the Specified launch total to equal 500000 Check the boxes for Launch horizon and Launch date Notice that the default Launch horizon is set to 12 the length of the data plus the forecast horizon and that the default Launch date is July 2012 the first forecast point Click OK to build the model 84 New Product Forecasting Examine the output Notice that the forecast now reflects the shape of the analog variable Now we will use the By Analogy method to prepare forecasts for the same product after we have 3 months worth of history Right click Product 3 on the Navigator to invoke the context menu and then select Model gt By Analogy Select _Profile 1 as the analog variable by clicking on it Select Launch horizon and set the number of periods to 12 The dialog box should now look like the one below Forecasting by Analogy Model Settings Select the analog variable Estimated launch total 364 960 Canc Hep Now that we have some historic data Forecast Pro Unlimited is able to fit the Analog model and calculate the estimated launch total from the historic demand The estimated launch total predicts that at our current rate we will sell 364 960 units during the Launch horizon the first 12 months in our example This is substantially less than the 500 000 units our market resear
50. should now match the display below E Forecast Pro Unlimited 64 bit Project03 a EN oN a 8 File Settings Operations Project View Window Help COG SO 664 TP O4 F O OOS Stuff Mart 2007 1 through 2012 Holdout 0 3 Total 3 Muffins COR 12 11 123 Bakery Inc BRA 12 11 Stuff Mart Customer BLU 12 11 APP 12 11 2 OAT 12 11 o ESERE IAE E SEEE EOE OEA ETE ESENE S TOENE IEEE EOE A E EEEN RREO EENEN Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 3 Grocery Land COR 12 11 BLU 12 11 APP 12 11 LS E E E E E A es eee 3 Food King COR 12 11 BLU 12 11 APP 12 11 VA 20 01 ST 20 02 Total gt Muffins gt Stuff Mart Total gt Muffins gt Sids Club ol gt 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan E History E Forecasts EE Forecast Interval Saving the Forecasts Forecast Pro Unlimited provides two different ways to output your forecasts Each is described below The Numeric Output file s is used to save the forecasts and other information in a concise format If you plan to import the forecasts into a database or a Saving the Forecasts 35 planning system this is the file you should use You have a great deal of control over the content and format of this file and can save it in text spreadsheet ODBC or XML formats The Forecast Report is an Excel file containing a separate forecast worksheet fo
51. situations Adjusting for 4 vs 5 Week Periods It is not uncommon for companies to divide the year into twelve periods each consisting of either four or five complete weeks This is often referred to as a 4 4 5 calendar In situations where the forecasts ultimately need to be broken down by week this method may be preferable to using actual calendar months which include partial weeks 89 If the number of weeks in each period is consistent from year to year 1 e period always has 4 weeks period 2 always has 4 weeks period 3 always has 5 weeks etc then the variation due to the number of weeks in each period will be captured as part of the seasonality and no special action is required In cases where the number of weeks in each period varies from year to year 1 e some years period has 4 weeks other years it has 5 a weighting transformation can be used to capture the variation due to how many weeks are in each period The procedure is very straightforward You construct a weighting variable that classifies each period of the historical data and forecast period as containing either 4 or 5 weeks Forecast Pro Unlimited divides the historical data by the weights This converts sales per period into sales per week per period This deweighted series is forecasted The forecasts are then reweighted by multiplying by the corresponding weights The data for this exercise are contained in two Excel files 4 4 5 Data xls contains five
52. the Percent Increment or Value buttons to write the desired overrides to the target override row or you can use the mouse to drag points on the graph If a time period has overrides in both Override 1 and Override 2 Override 2 will take precedence Highlight the Statistical values for August and September of 2012 Set the Percent box to 12 and click the Percent button Notice that the proposed overrides are written to the target row indicated to the immediate left of the Commit button in this example Override 1 Notice also that the values displayed in the Forecast row have not changed this is because we have not yet committed to the overrides Uncommitted overrides are displayed in red both in the override row and on the graph Click the Commit button to accept the overrides Notice that the formerly uncommitted values in the override row change to black the Forecast row is updated and the graph is updated Notice also that the icon for Total gt Muffins gt Stuff Mart on the Navigator now appears in red and the icons for Total gt Muffins and Total in yellow A red Navigator icon signifies that an override has been made to the item If a group 32 The Basics icon appears in yellow it signifies that an override has been made to a variable lower down that branch of the hierarchy When you make an adjustment to an item in a hierarchy Forecast Pro Unlimited will automatically reconcile the entire hierarchy to reflect the change Thus wh
53. the item is active and will be forecasted If an item s history ends prior to the ending date the item is inactive and will not be forecasted If you do not adjust the starting or ending dates Forecast Pro Unlimited will prepare forecasts using all available data for each active series For our current example we will not adjust the time span of the data nor will we define a holdout sample Reading in the Data 25 Generating the Forecasts SS Forecast Pro Unlimited 64 bit Project03 Za z cl C aS File Settings Operatio s Project View Window 9500 885 080 04 00008 Stuff Mart through 2012 Holdout 0 Total Muffins gt Boe Stuff Mart Customer COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club Grocery Land Food King He Cakes MB History HM Forecasts po Project03 Forecast Report Forecast Report for Stuff Mart Customer Total gt Muffins gt Stuff Mart Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins wil perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 9 265 and for Box Jenkins was 17 579 The roling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Based on the lower MAD will use Exponential Smoothing Click the red Forecast icon
54. to accept the overrides and comment Sharing a Stand alone Project 49 Now let s edit the row label Override 2 Click on the row label Override 2 and right mouse click to call up the context menu Select Edit Row Label Enter Management and click OK Notice that the row label has changed At this point we have several options on how we might save our work For instance we could Use File gt Save as to save a new forecast project to send back to John Click the purple Save Numeric Output icon to save an output file to submit to production management or some other destination Click the purple Save Forecast Report icon to save formatted reports to Excel Exit Forecast Pro Unlimited without saving changes to the Tutorial 4 part 1 project Working With Super Projects Let s consider the following example A company sells their products in three countries the United States Canada and Mexico They employ three different demand planners each of whom is responsible for forecasting a specific country After the demand planners have completed their forecasts they meet with management to review the forecasts and make any required adjustments Accomplishing this using a single stand alone project would require a sequential review process For example assume the demand planner for the United States goes first He or she would create a forecast project which includes all three countries and then review and make adjustments to
55. to dictate the amount of detail in the outlier report None turns outlier detection off The forecasts will be generated using the uncorrected history Detection only will detect outliers and display the suggested corrected values however the forecasts will be generated using the uncorrected history Detection and correction will detect outliers and will automatically use the corrected values when generating forecasts Sensitivity std deviations allows you to set the sensitivity of the outlier detection algorithm If a given fitted error exceeds this threshold and it is the largest error detected during the current iteration it will be flagged as an outlier Consult the Forecast Pro Statistical Reference Manual for details on how outlier detection and correction works Maximum iterations allows you to set the maximum number of iterations permitted during outlier detection for a given item This setting thereby also defines the maximum number of outliers than can be detected for a given item Consult the Forecast Pro Statistical Reference Manual for details on how outlier detection and correction works Include iteration statistics in reports allows you to include detailed statistics describing the outlier detection process in the outlier report Consult the Forecast Pro Statistical Reference Manual for details 186 Command Reference Options emt Basic_ Formats Outliers Ovemides Command Line Pareto Analysis Advanced Co
56. to turn on manual override mode is found on the Overrides tab of the Settings gt Options dialog box 6 Use Manual Recalculation By default Forecast Pro Unlimited will automatically recalculate the forecasts and re reconcile the hierarchy every time you apply a forecast modifier For large hierarchies this can be time consuming Forecast Pro Unlimited allows you turn off the automatic recalculation using an option of the Advanced Controls tab of the Settings gt Options menu If you turn this option off when you specify a forecast modifier the forecasts will not be updated until you click the red Forecast icon This allows you to specify multiple forecast modifiers without having to wait for the program to recalculate the forecasts in between each specification 7 Optimize Outlier Detection and Correction for Speed The outlier detection and correction algorithm will slow down the processing If you wish to use outlier detection and correction but speed is of concern one option is to initially run the forecasts in the detection only mode to detect the outliers and then turn outlier detection off and use the OUTLIER CORRECT modifier to perform the corrections on the detected items Speeding Up the Program 213 8 Don t Use xlsx Files If you are using xlsx files you might consider switching to csv or xls files XlIsx files are slower to read than csv and xls files and use over twice as much memory Also if you are using large spre
57. topic Help gt User Guide PDF Help gt User Guide PDF accesses a pdf version of the Forecast Pro Unlimited User s Guide Help gt User Guide PDF Help gt Statistical Reference PDF accesses a pdf version of the Forecast Pro Statistical Reference Manual Menu Items and Dialog Boxes 197 Help gt Check for Updates Help gt Check for Updates will check online to see if you are running the latest release of the program If a product update is available you ll receive a message alerting you to this fact with instructions describing how to receive the update If your support and maintenance contract 1s up to date product updates are free Help gt About Forecast Pro Unlimited Help gt About Forecast Pro Unlimited displays the Forecast Pro Unlimited version number and copyright notice Working With Super Projects There are two primary ways to work with others to establish the final forecasts using Forecast Pro Unlimited sequential review of a single stand alone project and consolidating multiple component projects into a super project using the Project Manager Sequential review of a single stand alone project is by far the simplest way to work with others to establish the final forecasts Using this approach the forecaster begins by creating forecasts for all items that need to be forecasted enters any desired overrides and saves a forecast project often to a network drive The project can then be opened by anyone
58. whether or not to allow negative forecasts The data for this lesson were copied into your Forecast Pro Unlimited input folder when you installed the program normally Forecast Pro Unlimited Input in your Public Documents folder Make sure that the Input Data directory is set correctly and that the other options match those shown above Click the OK button to accept the defaults and return to the main menu 22 The Basics If you are using a Forecaster license proceed to the next section Defining the Script If you are using a Collaborator license the next three sections Defining the Script Reading in the Data and Generating the Forecasts describe operations that are not supported The first step in a Collaborator session is to open a forecast project that was created by someone using a Forecaster license Select File gt Open and open the forecast project Tutorial 1 then skip the next three sections and proceed to the Viewing the Forecast Report section Defining the Script The next step is to define the script The script lists the data file s you wish to forecast In this example we will prepare sales forecasts for 123 Bakery The data consist of monthly sales of Muffins and Cakes Click the red Script icon 9 to call up the Define Script dialog box shown below Define Script P 123 Bakery English only csv 123 Bakery xls 123 Bakery xisx 4 5 Data xis 4 4 5 Helper xls ACME Hardware XLS xis
59. you to the following benefits e Free maintenance and support service for one year This service provides program updates and unlimited technical support for the first year you license the program After the first year this service is available on a subscription basis Technical support is provided via the telephone during regular business hours Eastern Standard Time via email mail and fax e Automatic notification of upgrades revisions and new products e Special pricing on upgrades revisions and new products Future Development of Forecast Pro Unlimited BFS has made many changes to Forecast Pro Unlimited to accommodate special needs and circumstances in the corporate environment BFS will continue to improve Forecast Pro Unlimited in the years to come If you What You Need to Run Forecast Pro Unlimited 7 encounter problems or have any suggestions for improvements or additional features please contact the BFS product development staff 8 Before You Begin Chapter 2 Installing Forecast Pro Unlimited Automatic Installation Forecast Pro Unlimited can be installed as a native 32 bit or native 64 bit application The installation program FPSetup exe will automatically detect the operating system you are running and install the appropriate version Running FPSetup is the recommended way to install Forecast Pro Unlimited If you would prefer to use an MSI to directly install the 64 bit version or if you are running a 64
60. 04 63 5 118 81 14 087 88 16 285 30 10 971 16 1 914 44 3 595 98 3 362 40 2 123 91 15 238 44 13 175 21 4 882 29 6 429 32 10 939 82 9 254 07 5 302 97 8 412 32 16 457 16 27 106 30 21 489 00 7 475 70 17 083 53 7 050 28 7 640 78 12 126 13 12 897 32 8 082 54 6 624 76 11 602 94 31 836 97 25 164 64 16 285 30 9 498 22 1 914 44 4 971 71 3 879 73 2 610 13 13 324 07 10 675 86 7 287 90 6 539 42 11 049 64 9 023 54 5 834 11 8 956 05 19 714 75 26 838 83 20 289 00 7 313 81 27 155 26 7 050 28 7 676 73 10 601 84 11 086 70 10 951 55 3 715 25 7 950 69 33 392 75 15 974 99 16 285 30 6 126 31 1 914 44 3 726 90 2 590 86 1 915 88 10 984 03 8 173 92 4 063 00 4 852 78 9 267 02 6 467 82 6 139 07 6 537 85 18 317 55 6 195 96 15 371 00 7 703 24 17 222 69 7 050 28 7 686 78 5 753 41 5 662 80 9 956 92 4 263 92 5 802 30 27 055 10 13 081 02 16 285 30 8 539 63 1 914 44 2 949 66 3 089 05 2 193 25 12 494 45 10 809 08 4 292 63 3 872 67 10 211 38 711 87 4 842 95 5 365 70 36 745 69 35 246 22 23 851 00 9 625 67 39 096 25 7 050 28 7 689 58 16 093 33 14 653 59 10 744 28 8 017 03 10 248 27 35 900 78 25 727 71 16 285 30 10 141 75 1 914 44 4 594 96 3 378 83 2 249 39 14 223 63 10 499 85 6 301 40 5 253 17 14 147 65 6 744 63 6 066 36 6 661 13 23 071 52 10 972 77 18 082 00 7 066 69 20 393 74 7 050 28 7 690 36 10 537 60 19 547 83 7 396 66 4 007 41 5 380 30 32 652 18 10 680 95
61. 068 04 0 00 08 H tough 2012 21 HH Holdout 0 Total Tutorial 4 USA Forecast overrides PG1 204 3 PG1 204 4 WINTERS PG1 204 5 1632 1804 2391 1492 1560 1751 1263 1098 1410 1 190 Value 1 219 Override 1 al t Help amp Tutorial 4 USA Forecast Report Forecast Report for PG1 204 2 Cases GFCI ivory Total gt USA gt PG1 204 2 Raw hierarchy is Total gt USA gt PG1 204 2 Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins will perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 150 and for Box Jenkins was 241 The rolling out of sample test used a maximum horizon of 6 and generated 21 forecasts for each method This is component project containing data for the United States Notice that it includes forecast overrides for Total gt USA gt PG1 204 2 and a forecast modifier for Total gt USA gt PG1 204 4 Select File gt Open and open the second component project Tutorial 4 Canada Open the project Tutorial 4 Mexico to view the third component project As you have observed the component projects have all been forecasted and include some overrides and forecast modifiers Working With Super Projects 51 Close the current project by selecting File gt Close and then open a new blank project by selecting File gt New Click the re
62. 12 11 CASE 12 count Corn Muffins Window ES Projectos Forecast override Project04 Forecast Report AO CORET E gt through 2012 S545 asa 16457 19715 18318 30746 23072 1234 14143 12284 6565 86 Forecast_ Formulas E Percent 10 1 Increment 1 gt Vae 6 545 Ovenide1 Help folle ls COR 12 11 CASE 12 count Corn Muffins Forecast Report for COR 12 14 CASE 12 count Corn Muffins Total gt Muffins gt Stuff Mart gt COR 12 11 Raw hierarchy is Total gt Muffins gt Stuff Mart gt COR 12 11 Expert Analysis lt override window lt graph window lt Forecast Report window The Forecast Pro Unlimited window consists of the following seven parts Menu bar Toolbar Dialog bar Navigator Hot List 7 view windows three are shown above Status bar The Menu bar The menu provides access to all commands A complete listing of all menu items and their associated dialog boxes is presented later in this chapter The Toolbar The icons on the toolbar provide a quick access to the most commonly used commands Here are the icons and their functions The Forecast Pro Unlimited Interface 163 0 e A O00 A SBSo OAO O00 New Project Closes the current forecast project allowing you to start a new one Open Project Opens an existing forecast project
63. 12 and then click on the Command Line tab 107 Options mS Basic_ Formats Outliers Ovemides Command Line Pareto Analysis Advanced Controls Project Components to Apply V Modfiers J Settings V Overrides o Cx Cancel z The Project Components to Apply section allows you to control how the forecasts are generated when the project is run from the command line If Modifiers is selected the project s forecast modifiers if any are present will be used to generate the forecasts in command line mode If this option is not selected all forecast modifiers in the project will be ignored when running from the command line If Overrides is selected the command line run will begin by reading in the data generating the statistical forecasts and then it will apply any matching overrides comments in the project to the new forecasts If this option is not selected all overrides in the project will be ignored when running from the command line If Settings is selected the command line run will use all of the settings associated with the project e g all settings in the Settings dialog box numeric output formatting etc If this option is not selected the default settings 1 e the settings that have been saved as the defaults for use with new projects will be used when running from the command line The Output Files section allows you to specify the output files to generate when the project is run from the command line
64. 16 285 30 7 134 37 1 914 44 5 394 88 3 162 30 2 513 96 11 451 83 8 621 23 5 220 16 4 601 58 7 242 34 6 528 81 3 303 77 6 782 65 11 233 73 10 792 16 19 127 00 7 292 36 4 567 44 7 050 28 7 690 58 5 553 18 8 590 81 6 679 80 3 981 86 4 584 89 29 618 46 15 668 70 16 285 30 5 267 31 1 914 44 3 613 00 2 866 00 1 709 51 9 475 05 6 331 71 4 425 19 3 838 98 12 553 38 5 449 08 3 149 82 5 858 68 Eers 14 142 66 6 564 45 20 482 00 8 178 07 1 068 15 7 050 28 7 690 64 5 839 08 6 993 20 7 836 08 4 060 51 7 664 24 11 609 61 20 171 74 16 285 30 12 546 79 1 914 44 4 855 89 3 661 39 2 627 06 16 625 20 13 921 64 4 604 97 4 465 63 19 766 10 6 093 07 6 826 52 6 578 33 The Numeric Output Preview window displays the contents and format of the currently specified Numeric Output file Click Settings gt Numeric Output Design Numeric Output Design Output Forecast file prefix E include tems without forecasts Output Format Time Series Data Model and Statistics Layout Data mode Orientation V Headings V Exclude group totals Exclude enditems 7 Single output file V Break record up into lines Transactions Enter Penod Help This dialog box allows you to design the Numeric Output The first tab allows you to specify the file type and control the layout The Time Series Data tab and the Model and Statistics tabs allow you to specify the con
65. 2 Orange Square Tub with Lid Raw hierarchy is SKU087 Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins will perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 779 and for Box Jenkins was 1 259 The roling out of sample test used a maximum horizon of 6 and generated 21 forecasts for each method Ready Notice that the model completely misses the January 2013 peak This is because we are fitting this point based solely on the past history and a demand peak of this magnitude is unprecedented Notice also that the forecast for January 2014 is substantially higher than the January peaks in 2011 and 2012 This is because the January 2013 peak has a substantial impact on the January 2014 forecast Since we know that the January 2013 peak is due to a promotion this is not an appropriate forecast We will now build an event model for SKU087 Right click on the graph to bring up the context menu and select Manage Events This invokes the Manage Events dialog box which is currently empty The first step in building event models is to define the event types you d like to use Modeling a One time Promotion 61 Forecast Pro Unlimited 64 bit Project01 ol X e Settinas Operations roject e A 000 00 089088040 0098 gt SKU087 ee SKU087 2 Orange Square Tub with Lid
66. 24 ounce bottle of MintyFresh Mouthwash Helpers _promos 2009 Jan L9 Tutorial 6 mouthwash Forecast Report Forecast Report for MintyFresh24 24 ounce bottle of MintyFresh Mouthwash Total gt MintyFresh24 Raw hierarchy is Total gt MintyFresh24 Model Details User Defined Simple exponential smoothing No trend No seasonal NNM 0 802 1 000 Multiplicative adjustment for events in _promos Confidence limits proportional to level Ready Examine the forecast report for MintyFresh24 Notice that an exponential smoothing model was used and that the model includes an event smoothing weight In addition notice that the adjusted R square is now 0 80 The graph the results reveals a much better fit to the data and forecast peaks that correspond to the months indicated as promoted rather than the seasonal pattern Notice that on the Navigator MintyFresh 24 now appears with a NEVENT _promos modifier to indicate that an event model was specified Select Apply Modifier s to on the Navigator s context menu and select All Items This will specify that event models using the _promos schedule should be built for every item on the Navigator In this example this is appropriate 66 Building Event Models since the same promotional schedule was used for both MintyFresh24 and MintyFresh32 If the two products had been promoted differently we would have created two separate ev
67. 39 seconds The 211 same run took 4 minutes on a Pentium I 600MHz machine and 24 minutes on a Pentium 90MHz Having enough RAM is also important we recommend 2 Gigs if you are running a 32 bit operating system and as much RAM as your budget can afford if you are running a 64 bit operating system As you use the program Forecast Pro Unlimited is storing and retrieving a great deal of information in memory If you do not have an adequate amount of RAM Forecast Pro Unlimited will resort to using virtual memory e caching to your hard drive This is substantially slower than using RAM Increasing the amount of RAM in your computer will improve performance of all of your applications 3 Work Locally Working with projects stored on a network drive can be substantially slower than working on a project stored locally Reading input data over the network and saving output files to network drives can also be substantially slower than reading and writing from a local drive If you are currently saving your projects to a network drive saving them to a local drive will improve performance considerably If you are currently reading your input data from a network drive and or saving output files to a network drive moving them to a local drive will speed up read write operations considerably 4 Use Zipped Projects As we mentioned above in some networked environments working with projects stored on a network drive can be substantially s
68. 5 The Navigator The Navigator is the primary way to select an item to view in the forecast report graph and override windows After the data have been read the Navigator displays the available time series in a tree structure Selecting an item on the Navigator will automatically display all relevant information in the open views The Navigator also features color coded icons to allow you to spot items that contain overrides and or comments A red icon indicates that the item contains an override and or comment A green icon indicates that the item does not contain an override or comment A yellow icon on a group indicates that at least one item further down that branch of the tree contains an override and or comment ES Forecast Pro Unlimited 64 bit Project04 bo N h 3 TA _ s x File Settings Operations Project View Window Help 006 50 6465 0804 0 00S COR 12 11 gt through 2012 Holdout 0 Total GS Project04 Graph ol ols Muffins Stuff Mart COR 12 11 CASE 12 count Corn Muffins gt a COR 12 11 BRA 12 11 Add to Hot List BLU 12 11 APP 12 11 OAT 12 11 3 Sids Club Weights gt COR 12 11 Outliers BRA 12 11 BLU 12 11 APP 12 11 Grocery Land Apply Modifier s To l f ai COR 12 11 Il IL L 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan S AEN lop aow E History E Forecasts MM Forecast Interval APP 12 11 Food King COR 12 11 Expand All Model Custom Modifier Rem
69. 7 1 gt through 2012 gt 6 Holdout 0 3 Total Project03 Graph 3 Muffins gt Bo COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club 4 Grocery Land Food King a Ready The green line on the graph represents the demand history for Total gt Muffins gt Stuff Mart The red line is the forecast and the blue lines are the confidence limits Move the cursor to a point on the graph hold the mouse very still and click the left mouse button Notice that the display now includes a vertical red line and a box listing the corresponding date and numeric values of the graph variables Click January 2013 the months are marked along the X axis Notice that the red line and box have moved to the new location Customizing the Graph View 29 Forecast Pro Unlimited 64 bit Project03 M e T Ee Ss a e File Settings Operations Project View Window Help 000G aoe a aO 0S Stuff Mart 2007 1 gt though 2012 gt 6 Holdout 0 Stuff Mart Customer st 79 589 Rea Click the right mouse button to invoke the Graph view s context menu Select Data Only Notice that selecting Data Only turned off all of the forecast related components e g the forecasts and confidence limits Select Data Only a second time to turn the forecast related components back on Click the right mouse button to redisplay the context menu Notice that each indivi
70. Canada would open the project review and adjust the Canadian data and save the revised project Next the planner for Mexico would open the project review and adjust the Mexican data and save the revised project At this point the demand planners forecasts are complete and the project is ready for the management review meeting Clearly there are some downsides to the above procedure One is that the demand planners cannot work on their country level forecasts simultaneously they have to wait until it is their turn to do so Another problem is that even though they are working on a single country the project contains data and forecasts for all three countries which makes it harder to manage and more prone to error The advantage of a forecasting process that uses a sequential review of a single stand alone project is that 1s much simpler to implement and maintain than one that uses a super project If it is not essential that your total hierarchy be broken out into smaller pieces then sequential review of stand alone projects is the preferred approach Using the super project approach with our example we d create a separate forecasting project for each country and then consolidate them into a new super project which includes all three countries The advantage is that the three demand planners can work on their forecasts simultaneously using a project that only contains their country When all three are done the Project Manager is u
71. Do not detect nor correct outliers for the specified item Outliers gt Detect OUTLIER DETECT Detect and report outliers for the specified item but do not correct for them 1 e base the forecasts on the uncorrected values Outliers gt Correct OUTLIER CORRECT Detect and correct outliers for the specified item 1 e base the forecasts on the corrected values Reconciliation Modifiers If no group level reconciliation modifiers have been specified a bottom up approach will be used to reconcile the forecasts The procedure operates as follows First Forecast Pro Unlimited prepares forecasts for each and every group and item Then it recomputes the group level forecasts by aggregating the constituent forecast bottom up The original group level forecasts are replaced but their confidence limits are retained and proportionately adjusted Two group level modifiers can be used to specify alternative reconciliation approaches These modifiers can only be used on group level data Reconciliation Modifiers 157 Top down TOPDOWN directs Forecast Pro Unlimited to perform top down reconciliation for all members of the indicated group This procedure begins by preparing forecasts for each and every group and item Then it proportionally adjusts the nested lower level items and groups forecasts to sum to the TOPDOWN group forecast If the YTOPDOWN group is itself nested within larger groups the forecasts for the larger groups a
72. ForecastPRO forecastpro com BUSINESS FORECAST SYSTEMS The comprehensive solution for all of your business forecasting needs Forecast Pro Unlimited User s Guide Eric A Stellwagen Business Forecast Systems Inc Copyright 1990 2013 Business Forecast Systems Inc All Rights Reserved Worldwide No part of this document may be reproduced without express written permission of Business Forecast Systems Inc Software Version 8 1 Manual Last Revised November 19 2013 Business Forecast Systems Inc 68 Leonard Street Belmont MA 02478 USA Phone 617 484 5050 Fax 617 484 9219 Email info forecastpro com Web www forecastpro com Copyright Notice Copyright 1990 2013 by Business Forecast Systems Inc All Rights Reserved Worldwide No part of this manual may be reproduced transmitted transcribed stored in a retrieval system or translated into any human or computer language in any form or by any means electronic mechanical magnetic optical chemical manual or otherwise without express written permission of Business Forecast Systems Inc 68 Leonard Street Belmont MA 02478 USA Disclaimer Business Forecast Systems Inc makes no representations or warranties with respect to the contents hereof and specifically disclaims any implied warranties of merchantability or fitness for any particular purpose Further Business Forecast Systems Inc reserves the right to revise this publication and to
73. H 20 01 CA 20 01 BU 20 02 Cakes Grocery Land VA 20 01 Cakes Grocery Land LF 20 02 Cakes Grocery Land LE 20 02 Cakes Grocery Land CO 20 01 Cakes Grocery Land CH 20 01 Cakes Grocery Land CA 20 01 Cakes Grocery Land BU 20 02 4 gt Sheet1 2 Ready Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 1 Increased for a 4th of July holiday cake sale Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations Override 2 G Land to discontinue cakes at 40 of store locations External Overrides for 123 Bakery Rows Compatibility Mode Microsoft Excel Formu las Data Review Add Ins AbleBits com IAA zs Xr Sy Wrap Text General F z g Format Cel s Table Styles tyle or ago Pg Tun TK AutoSum oY KR frie d Insert Del
74. IIIpvopp m ZzZzx TrTIr S ArII 3 eoggess a HHFH mos E mom PEPZ2eFoags FF R22 58 SGeRe ex g EIE BeER ER ELE pa aes 5 SESI GEEK You can type the filenames on the script one to a line or you can double click the filename displayed in the list box to insert the filename onto the script If you are in ODBC mode the tables and queries in your database replace filenames Double click the filename 723 Bakery to insert it on the first line of the script When you list a data file on a line of the script the program will forecast every series in the data file Thus our first line instructs the program to forecast all series found in 723 Bakery xls Defining the Script 23 Define Script 123 Bakery H ic Wsers Public D ocuments Forecast Pro Unkmited Input Browse Your script should look like the one above Accept the script and return to the main menu by clicking the OK button Reading in the Data You may have noticed that the red Read Data icon which had been grayed out is now activated Click this icon to read the data into memory When you read data any existing data in memory is replaced Click the green View Graph icon to open the graph view and display a graph for 123 Bakery Double click Total on the Navigator to expand the Navigator s tree You ll see that the total sales breakdown into Muffins and Cakes Select Total gt Muffins on the Navigator
75. Ins AbleBits com 9 o rP x BISO f A B C D E G H J K L M H 1 Total Category Customer SKU Description Starting Year Starting Period Periods Per Year Periods Per Cycle Jan 07 Feb 07 Mar 07 Apr 07 MI 2 Muffins Stuff Mart COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 3 BRA 12 11 CASE 12 count Bran Muffins 2007 1 12 12 20829 72 576 11 016 0 4 BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 5 APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 6 763 7 661 9 561 6 076 6 OAT 12 11 CASE 12 count Oatmeal Muffins 2007 1 12 12 21 042 0 0 0 7 Sids Club COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 8 BRA 12 11 CASE 12 count Bran Muffins 2007 1 12 12 3 572 4 000 2 808 5 184 9 BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 15 307 1 866 3 477 6 501 10 APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 25 404 450 906 4 986 11 Grocery Land COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 12 BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 7 383 6 512 4 375 3 165 13 APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 21 729 13 780 9 072 6 652 14 Food King COR 12 11CASE 12 count Corn Muffins 2007 1 12 12 15 BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 16 APP 12 11 CASE 12 count Apple Muffins 2007 1 12 12 17 Cakes Stuff Mart VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 0 840 18480 15 120 18 ST 20 02 CASE 20 oz Strawberry Pound Cake 2007 1 12 12 1 563 1 143 1 767 1 351 19 LF 20 02 CASE 20
76. ItemA2 are locked Forecast Pro Unlimited will display an error message and reject the override Let s now modify the above hierarchy by overriding the forecast for GroupB to equal 50 This results in the hierarchy shown in Figure 8 below GroupA GroupB S 2 S 3 F 150 O 50 F 50 ItemA1 ItemA2 ItemB 1 ItemB2 S 1 Set S I S 2 O 75 O 75 O 150 F 100 F 75 F 75 F 150 Figure 8 Notice that the override for GroupB resulted in a negative committed Forecast for ItemB2 This result assumes that the Allow Negative Forecasts setting in the Forecast Pro Unlimited Options dialog box was selected If this setting was not selected the override could not be made and Forecast Pro Unlimited would display an error message and reject the override 208 Understanding How Forecast Overrides are Allocated Summation It should be quite apparent that if you make adjustments to more than one level of a hierarchy the reconciliation becomes quite complex Although several of the examples presented seemed involved they were actually quite simple hierarchies consisting of only 3 levels and 4 end items Most users of Forecast Pro Unlimited are working with thousands of items and much more complex hierarchies In developing the reconciliation routine for Forecast Pro Unlimited the authors considered using several different algorithms In many situations the choice of which algorithm to use would change the forecast values sometimes significantly
77. Licens A Sreement sxiscccevacdesvsaseadnedustaed taxetbaxcenecdnavarbexdtexalsovtausedaacss 215 DUS SCSI CNC adi 5 hea ai cceat cole en ueida A A neous 218 DING OX ccsscdossesstenscesicissacestanscacachassassdaneceaiccasacasdansencactansastdaneceatacasacssteascasactaseass 221 vii GETTING STARTED Chapter 1 Before You Begin Forecasters and Collaborators Forecast Pro Unlimited is available in two different types of licenses Forecaster licenses and Collaborator licenses The type of license you install will dictate the functionality you can access A Forecaster has access to all of the functionality described in this manual A Collaborator can view and manipulate a forecast project created by a Forecaster including viewing graphs and reports adding overrides and comments saving output etc but cannot generate new Statistical forecasts Operationally the two installations are very similar however a Collaborator does not have access to any of the functionality relating to reading historical data and generating statistical forecasts Thus there are sections of this manual which will not be relevant to Collaborators How to Use This Manual This manual is divided into three parts Part 1 Getting Started Chapter I describes the Forecast Pro Unlimited system requirements and product support policy Chapter 2 describes the installation procedure Chapter 3 provides an overview of forecasting Part 2 Tutorial Lesson I walks
78. M Forecast Interval 2 Orange Square Tub with Lid SKU087 Using rule based logic have narro will perform an out of sample testi Rea Click on January 2013 on the graph Notice that the Manage Events dialog box displays the selected date and that a marker also appears on the graph to indicate that the period has been selected Use the dropdown control to assign the Free gift month event to the selection Notice that the assignment now appears in the lower section with a status of Pending Click the Commit button to accept the assignment and build the event model ES Forecast Pro Unlimited 64 bit Project01 lo xz File Settings Operations Project View Window Help 06056646 5 01689 04 5 0046 1 through 2013 12 Holdout 0 SKU087 EVENT _ScheduleO1 a _Helpers SKU087 2 Orange Square Tub with Lid Ub 4 cob oe de coh oo hoe cf ee poo des ee hen decnpendee Ss Le ee eet ee ee ee wah en deca oe dee cece b ee decebec hee decepee 2011 Jan 2012 Jan 2013 Jan 2014 Jan BE History Hl Fitted Values HM Forecasts HM Forecast Interval Free gift month 2 Orange Square Tub with Lid SKU087 r Date Description EventCode Status Raw bis is SKU087 2013 Jan Free gift month 1 User Defined Exponential smoothing No tre NAA 0 009 0 224 0 968 Additive adjustment for events in Commit L Ready Modeling a One time Promotion 63 Notice the dramatic improvement
79. None of the algorithms were statistically superior to the others they were simply different Virtually all of the complexity and differences between algorithms disappears if you restrict yourself to making forecast adjustments to a single level of the hierarchy Although we ve stated this previously it s worth repeating If you restrict your overrides to a single level of the hierarchy the reconciliation process is simple and intuitive We strongly urge you to limit your overrides to a single level if at all possible Summation 209 Appendixes Speeding Up the Program If decreasing processing time is important for your application you may wish to investigate some of the following options 1 Use the 64 bit Version Forecast Pro Unlimited can be installed as either a 32 bit or 64 bit application If you are currently running the 32 bit version migrating to the 64 bit version will speed up various operations such as opening and saving projects and will also allow you to work with larger data sets 2 Upgrade Your Hardware Upgrading your hardware will improve performance dramatically Forecast Pro Unlimited will run on any Intel processor from the 386 on Since this product deals with large amounts of floating point data it makes sense to run it on as fast a machine as possible As an illustration using expert selection and four years of monthly history per item a Core2 2 2GHz machine forecasted 10 000 items in
80. ONA xa msciicloteaireasdeic beara mantic T 117 Spreads hec FOMA pni a adtaahapen twa eaeeea coetons 118 TFX METI TOMA S een A 123 Using ODBC arcs ta a a 125 Using Attribute Fields to Define a Hierarchy nsoessseeeennssssssssserrsssssssse 128 Helper FiloSeaenaunnianane ao r a a 130 OV rine Pile Sni a ia oad 131 VOTE OTE IO e T E EA 132 Savine Your Work siscsateveveseuravedivestecestensviceceutecaviarsecdadestucusbensisermeetecaeasnentees 135 Forecast Proje Sesan a a a a heatiens 136 INUMIeTIC Qutput File Serpenite EEE 138 Pormatted Forecast REpOms iiiavisctiaxes sacdsssoavaduatvud aseiherdeaetiansanertandduateedtaeadhacts 139 lent Ropo aati cesar nei tae aa ected tae lake esa ean tae Ra ceeceN aGces 140 COV Ce INC DOU Sherrard eterna a au wie hah ia duneabon Suto 140 COUTHERIR COIs 425 5 tertiaerncnssessate A eee na 140 Working With Scripts and Hierarchies sccccccccssssssssssssccccsccessscsees 143 Dehn The SCPE seess e e ea 143 Define the Mierarc hy eiee S 144 Reconciine the Hierarchy ernn e tide eAG as 145 Usine Forecast ModilieTS sressisssrecienieroeen eoan eepe eiaa rN 149 Model Specification Modifiers sdeccccssese acetic nsh ei ieioleee et oneeias 149 Event Mode Modit Sse EE 155 The Weighting Transformation Modifier cccccccccccccceessseeeeeeeeeeeeeeaeeees 156 Outlier Detection Correction Modifiers eessssseeeeeessssssseseersssssseeeerssssss 156 Reconcihk ton Modi Hets ocarus aal 157 Miscellane
81. ONS A You acknowledge that You have read this EULA understand it and agree to be bound by its terms and conditions This EULA supersedes all prior agreements oral or written communications proposals representations and watranties and prevails over any conflicting or additional terms of any quote order acknowledgment or other communication between the parties relating to its subject matter during the term of this EULA No modification of this EULA will be binding unless made in writing and signed by an authorized representative of each party B In the event that any portion of this EULA is held unenforceable the unenforceable portion shall be construed in accordance with applicable law as nearly as possible to reflect the original intentions of the parties and the remainder of this EULA shall remain in full force and effect C This EULA will be governed by and construed and enforced according to the laws of the Commonwealth of Massachusetts USA excluding its conflict of law provisions Suggested Reading The Forecast Pro Statistical Reference Manual is a pdf document that is copied to the program directory when you install Forecast Pro It is also accessible via the Forecast Pro help system and is the primary suggested reference for all of the forecasting techniques statistics and algorithms found in Forecast Pro 218 Appendixes The Forecast Pro Statistical Reference Manual includes an extensive bibliography A few recommende
82. R 12 11 COR 12 11 CASE 12 count Corn Muffins SO Le ee oe ee ee i ee ge ee Import from Export to MM Forecasts lt Display Ancestry Display gt BLU 12 11 APP 12 11 Save Numeric Output Cakes Save Forecast Report r COR 12 11 Remove gt Mutfins gt Stuff Mart gt COR 12 11 Total gt Muffins Total gt Muffins gt Stuff Mart Order by Total gt Muffins gt Mart gt 12 Total gt Muffins gt Stuff Mart gt BLU 12 11 Total gt Muffins gt Stuff Mart gt APP 12 11 Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins Total gt Muffins gt Stuff Mart gt OAT 12 11 Total gt Muffins gt Sids Club Total gt Muffins gt Sids Club gt COR 12 11 Total gt wafting gt Sids Club gt BRA 12 11 Total gt Muffins gt Sids Gub gt BLU 12 11 4 m wil perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 3 037 and for Box Jenkins was 3 097 The roling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Ready The Hot List s context menu allows you to change how items are displayed save Numeric Output files and Forecast Report Files for the current Hot List items and remove items from the current Hot List The Import from option allows you to import a Hot List from another project or from an Excel file The
83. Total Total Total Expert Analysis Using rule based logic I have narrowed down the choice to exponential smoothing or Box Jenkins w perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 36 691 and for Box Jenkins was 44 440 The rolling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Based on the lower MAD will use Exponential Smoothing Notice that the Navigator tree structure matches the hierarchy shown below vFormat_Film The tree contains three group variables Total Camera and Film The tree also contains six end items vCamera 1Camera vFormat_Film iCamera_Film ASA100_BW and ASA100_Color The demand histories for group variables are not in the database They are created by Forecast Pro Unlimited by aggregating the appropriate end items Thus the history for the group Camera is defined as the sum of vCamera iCamera The history for the group Film is defined as the sum of vFormat_Film 1Camera_Film ASA100_BW ASA100_Color The history for the group Total is defined as the sum of the groups Camera Film When you forecast a multiple level hierarchy Forecast Pro Unlimited will automatically reconcile the forecasts By default a bottom up reconciliation will be performed this is the case in our current example That means that the group level forecasts will be generated by aggrega
84. Your Data Column format If your data are already stored by columns you will want to consider the column format first You can probably alter your spreadsheet to the Forecast Pro Unlimited row layout in just a few minutes In column format each time series occupies a single column on the spreadsheet The data are assumed to reside in the topmost first spreadsheet in the workbook unless an alternate sheet has been specified by naming it BFSDATA Column A of the spreadsheet is devoted to row headings The keyword description must be used as the row heading for the description row The other cells in column A are ignored by Forecast Pro Unlimited You can use them for titles calendar information etc Here is an example of a column format spreadsheet T EE ne e gt A SKUs manual V XLS Compatibility Mode Microsoft Excel Home Insert Page Layout Formulas Data Review View Add Ins 9x B Arial 10 o General 3 Inset E a7 ra gt ba 3 a B J UA A EZE H a 3 Delete g Fe a aste ERA Sr a ey Fes o in Flaa EE 50888 Format lt 27 Filter Select Clipboard Font E Alignment a Number Cells Editing B C E Variable Name PG1 204 1 PG1 204 2 PG1 204 3 PG1 203 4 PG1 203 5 Description 2 Bolt Anchors 4 Bolt Anchors 2 Staple Anchors 3 Staple Anchors 4 Staple Anchors Starting Year 2002 2002 Starting Period 11 11 Periods Per Y
85. a Four to seven years 1s even better since there 1s more information from which the program can separate seasonality and trend from the noise 114 Setting Up Your Data There is little additional payoff in accuracy beyond about seven years of data and the cost in computer time can be substantial Missing values and zeros Each of the statistical forecasting methods requires an unbroken stream of historic values Unfortunately however missing values are common in business data You therefore need a well formulated approach to missing data There are two parts to the approach You must first decide how to encode missing values in the input data file Then you must decide how these missing values are to be treated by Forecast Pro Unlimited The encoding of missing values depends upon the data format However one problem is common to all of the formats the distinction between missing values and zeroes Forecast Pro Unlimited ordinarily considers zeroes to be actual data values and treats them as such If they were really intended as missing values then the forecasts can be badly biased Forecast Pro Unlimited treats a sequence of leading zeroes as missing values if you check Ignore leading zeroes on the Formats tab of the Settings gt Options dialog box and it treats trailing zeroes as missing if you check Ignore trailing zeroes If you can avoid using this strategy do so Its dependence upon these flag settings makes it a litt
86. ach variable name must be unique If you are using attribute fields each variable name within a given group must be unique If you use zeroes to pad the data prior to an item s availability make sure that Ignore leading zeros is selected on the Formats tab of the Settings Options dialog box 122 Setting Up Your Data Text MLT Formats A multivariate text file contains information for all the series you wish to forecast from a single line of the script file This file is stored as an editable text file with the extension MLT You must create this file outside of the program making sure that you format it appropriately The MLT file format is straightforward The file begins with record headings followed by a semicolon The record headings are required for the Variable Name and Description fields and are optional for all other records You can use them for titles calendar information etc if you wish After the record headings comes header information for the first variable followed by decimal numbers representing the historical data and then a semicolon This is followed by the same format for subsequent time series Two semicolons in a row mark the end of the MLT file Since Forecast Pro Unlimited recognizes spaces tabs and returns as equivalent terminators you have a great deal of flexibility in formatting your data The most common format is to organize series by rows as in the following example is TextPad C U
87. adsheet files breaking them up into several smaller files or increasing the amount of RAM available will speed up processing 9 Optimize Model Selection for Speed Specifying Exclude ARIMA on the Advanced Controls tab of the Settings gt Options dialog box will speed up forecast generation considerably This option will remove Box Jenkins models from consideration when using expert selection If you are forecasting data where the number of periods per cycle is greater than 13 e g weekly data you might consider turning on the Exclude seasonal simplification option in the Advanced Controls tab of the Settings gt Options dialog box If this switch is on Forecast Pro Unlimited s expert selection mode will not consider seasonally simplified forms of exponential smoothing models This will speed up forecast generation considerably Specifying the models to use rather than using the expert selection will substantially improve performance This will require some work to determine the best type of model to use for your data The best way to determine the appropriate model for your data set 1s to experiment using the forecast evaluation procedures see methodology chapter in the Forecast Pro Statistical Reference Manual for details 214 Appendixes End user License Agreement This End user License Agreement EULA is a legal agreement between Licensee either an individual or a single entity and Business Forecast Systems I
88. aicrses caencsusaandacatesdoaavdondestaiadinnee 44 Step Two Opening Your Forecast Project ssesssesoeeessssssssseerssssssssserssss 44 Step three Savine Your WorKessensiee e e a a 46 Collaborating With ColleagueSs ssssssssscscccceccccccscssssssssscsccceecceosssssssssssoo 47 Stand alone Project vs Super Projectes a 47 SHAE Sao Stand alone Proje tasse A A 48 Working With Super Projects sisi ccnieis onesies a a E Ea 50 Pareto Analysis and Report Filtering ssccccsccssssssssssssssccccsccessssscsees 55 Defining Pareto Classifications Within Forecast Pro cccececcceeeeeeeeeeeeees 55 Sorting and Filtering the Pareto Output eccccecceccceeeeeseeeeeeeeeeeeeaenees 57 B ildi ng Event Models esses ssceiceiss seaseetcazesnss ccasscsssussestaccesesosctusestacccescesuuseatss 59 Modelni a One time Promot oiressnere e N 60 Modeling a Recurring Promotion ccccccsssssssseececceeeeeeesseececeeeeesaeeeeeeeess 64 Modeling Weekly Dita rerna 67 Ad Osiment otn SiS anr a einaeet 70 More Adjustments Tor Promotion Ssss 71 Building Multiple Level Models cccccccssssssssssscccccccsssssssscsccccsscssssssees 73 Bottom up and Top down Forecasting cccccccssesssecccececceaeeeeeeeeeeeeeeeeeeeeeees 73 Defining Groups Using Attribute Fields eccccccccccceesseeeeeeeeeeeeeaaeenseeeees 76 Combining Multiple Level and Event Adjustment Models 0 ee TI SNOVE PROMOS or n E 78 New Product For
89. ails of your forecasting process Many users do not modify the forecasts in the super project but rather just use the super project as a way of viewing the consolidated forecast and saving output files If this is the case you may want to simply update the component projects and create a new super project every time new data becomes available 200 Command Reference If you are entering modifications e g overrides and modifiers in the super project then then the updating process may be a bit more involved If necessary you can import overrides and modifiers from the super project into the component projects using Project gt Import gt Overrides From and Project gt Import gt Modifiers From Once the component projects are updated the Project Manager allows you to either delete the super project s overrides and or modifiers prior to importing from the component projects or leave them intact As you can see setting up and maintaining super projects is reasonably complex Keep in mind that Business Forecast Systems and Forecast Pro distributors also offer consulting services to help you establish your forecasting process Command line Operation You can run Forecast Pro Unlimited noninteractively When the command line to execute the program includes a project filename FPZip or FPProj and the b parameter Forecast Pro Unlimited will read in the data create the forecasts save all output files and then exit This feature is particu
90. al the committed Forecasts Total S25 F 5 GroupA GroupB S 2 S 3 F 2 F 3 ItemA1 ItemA2 ItemB 1 ItemB S 1 S 1 S 1 S 2 F 1 F 1 F 1 F 2 Figure 1 Let s now modify the above hierarchy by overriding the forecast for ItemA 1 to equal 75 This results in the hierarchy shown in Figure 2 below Total S 5 F 79 GroupA GroupB Ss2 S 3 F 76 F 3 ItemA1 ItemA2 ItemB1 ItemB2 S 1 S 1 S 1 S 2 O 75 F 1 F 1 F 2 F 75 Figure 2 Notice that at this point the committed Forecasts for GroupA and Total do not equal the Statistical forecasts If we had started with the hierarchy depicted in Figure 1 and adjusted the GroupB forecast to 75 rather than ItemA1 we would generate Figure 3 204 Understanding How Forecast Overrides are Allocated F 77 GroupA GroupB S 2 S 3 F 2 O 75 F 75 ItemA1 ItemA2 ItemB 1 ItemB2 S 1 S 1 S S 2 F 1 F 1 F225 F 50 Figure 3 Notice that the committed Forecasts for ItemB1 ItemB2 and Total do not equal the Statistical forecasts Notice also that Forecast Pro Unlimited allocated the GroupB override to ItemB1 and ItemB2 based on the proportions established by their Statistical forecasts Adjustments Made to More Than One Level In this section we will describe how Forecast Pro Unlimited reconciles the forecast hierarchy when overrides are made to more than one level of the hierarchy Important There are many ways that this type of reconciliation could be performed each one leading t
91. all of the items from highest volume to lowest volume and then sequentially place the top ranked items into the A group until their cumulative volume equals or exceeds 80 of the total volume It will then sequentially place items into the B group until the cumulative volume of the A and B items equals or exceeds 95 80 15 The remaining items 5 or less of the cumulative volume are assigned type C Series Count This option allows you to assign specific numbers of items to each group For example if you had 1 000 items and you set the A group to 100 the B group to 200 and the C group to 700 the 100 highest volume items would be assigned to group A the next highest 200 items would be assigned to group B and the remaining 700 would be assigned to group C Series Count This option allows you to assign a specified percentage of the total number of items you have to each group For example if A is set to 20 B is set to 50 and C 1s set to 30 Forecast Pro Unlimited will first rank all of the items from highest volume to lowest volume and then sequentially place the top ranked items into the A group until the number of A group items equals 20 of the total number of items It will then sequentially place items into the B group until the number of B group items equals 50 of the total number of items The remaining items 30 of the total number of series are assigned type C Group zero volume If this option is on then any item
92. also that Forecast Pro Unlimited has restored the Hot List forecast modifiers and overrides and that the overrides correctly reflect the new dates At this point we have generated a new forecast Let s save this project using a different name so that we can retain both our Tutorial 3 June 2012 project and our new July forecasts Select File gt Save As and name the project Tutorial 3 July 2012 Step Two Opening Your Forecast Project 45 Step Three Saving Your Work If this was a real forecasting session we would now review the new forecasts add any needed overrides adjust the forecasting models as appropriate share the forecast project with others etc until we establish the final July forecast Once we ve established the final forecast we would save our final project file for the July forecast and save any desired output files Exit Forecast Pro Unlimited using File gt Exit This concludes Lesson 3 46 Updating a Forecast Project Lesson 4 Collaborating With Colleagues Corporate forecasting often requires collaboration among colleagues Perhaps your manager wishes to review your forecasts and make a few changes Perhaps you want to run your forecasts past the sales force who may know about pending orders Perhaps your business has distinctly different markets that require specific individuals to work on specific markets Whatever the reason it 1s often useful to be able to work with others to establish the final foreca
93. an automated algorithm to detect and optionally correct outliers In this lesson we will explore its operation How Outlier Detection and Correction Works Start Forecast Pro Unlimited select Settings gt Options and display the Outliers tab Options Cx Basic Formats Outliers Qvemides Command Line Pareto Analysis Advanced Controls None Sensitivity std deviations Detection only Maximum iterations There are three modes for outlier detection and correction None turns outlier detection and correction off This is the default and many Forecast Pro Unlimited users do not use nor need to use outlier detection Detection only will detect outliers and display the suggested corrected values however the forecasts will be generated using the uncorrected history Detection and correction will detect outliers and will automatically use the corrected values when generating forecasts The detection and correction algorithm works as follows 1 The specified forecasting model is fit to the time series the residuals fitted errors are generated and their standard deviation is calculated 2 If the size of the largest error exceeds the outlier threshold the point is flagged as an outlier and the historic value for the period is replaced with the fitted value 96 Detecting and Correcting Outliers 3 The procedure is then repeated using the corrected history until either no outliers are detected or the speci
94. ast Pro Unlimited will automatically select a forecasting model for each item on the Navigator using expert selection The expert selection option works extremely well and is the method of choice for the majority of Forecast Pro Unlimited users The expert selection algorithm is described in the Forecast Pro Statistical Reference Manual Alternatively you can dictate the models and or forecasting options using forecast modifiers Forecast modifiers are added to items on the Navigator using the Navigator s context menu This chapter documents the available modifiers A complete listing of the available modifiers is also found in the on line help system Model Specification Modifiers Model specification modifiers are used to dictate that a specific model be used for the time series Supported modifiers are listed below grouped by model type 149 Expert Selection Model gt Expert Selection no modifier If an item on the Navigator does not contain a modifier then Forecast Pro will use its expert selection algorithm to automatically select the appropriate forecasting method If an item on the Navigator does contain one or more modifiers and you select Model gt Expert Selection the modifiers will be removed and Forecast Pro will use its expert selection algorithm to automatically select the appropriate forecasting method Exponential Smoothing Model gt Exponential Smoothing gt Auto EXSM Use the automatic fitting exponential smoothi
95. ast project File gt Print is used to print the currently selected view File gt Print Preview is used to display the currently selected view formatted as it will be printed see File gt Print above Checking the appearance of the output prior to printing can save you trips to the printer File gt Print Setup is used to change various printing options File gt Exit is used to exit Forecast Pro Unlimited The Settings Menu The settings menu provides access to the Options dialog box which allows you to change your project settings and to other dialog boxes which allow you to customize the various Forecast Pro Unlimited views With the exception of Settings gt Options which is described below all of the other menu options lead to dialog boxes that are described in detail in the Forecast Pro Unlimited Interface chapter Settings gt Options Selecting Settings gt Options opens the Options dialog box which is used to change various Forecast Pro Unlimited settings The Settings dialog box contains both a Set as Default button and an OK button Clicking the OK button will save your current settings for use with the current project Clicking the Set as Default button will save your current settings for use with the current project and also save them as the default settings for all new projects The Settings dialog box contains seven pages or tabs We will discuss each in turn 182 Command Reference Options Basic Formats O
96. ation 107 201 Confidence limits 12 158 183 Convert to SQLite 193 Croston s model 13 CSV 117 118 Curve fitting modifiers 153 Data directory 183 Data files CSV 117 118 format 183 header information 116 MLT 118 123 path 183 selecting format 117 WK 117 118 XLS 117 118 Data length 15 114 Data mode 183 WKI1 column format 121 row format 119 XLS column format 121 row format 119 Data only 171 db files 137 Decimal separator 184 Detection and correction 186 222 Index Detection only 186 Enable event manager 192 Erase 195 Event adjustment 77 Event Manager 179 Event models 59 155 Event Models 14 Event variable 59 Excel 117 118 Exclude ARIMA 191 Exclude seasonal simplification 191 Exit 182 Exponential smoothing 14 modifiers 150 Fcb files 137 File Close 181 File Exit 182 File New 181 File Open 181 File Print 182 File Print Preview 182 File Print Setup 182 File Save 181 File Save as 182 Filters 196 Forecast by Analogy 14 Forecast command 193 Forecast file prefix 177 Forecast horizon 183 Forecast modifiers 149 Forecast projects 136 Forecast Report view 168 Forecast reports 139 FPProj files 137 FPZIP files 212 Generic dates 191 Graph settings 170 Graph view 170 Hardware requirements 7 Header 116 Help topics 197 Helper files 130 Hot List 167 Icons 163 Import Helpers 194 Import Hot List 194 Impo
97. atistical 6 545 8 459 16457 19 715 18318 36 746 23 072 11 234 14 143 12 264 6565 8628 gt BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Forecast 6545 8459 16457 19715 18318 36 746 23072 11 234 14143 12264 6565 8 628 Sids Club COR 12 11 BRA 12 11 s Percent 10 increment 1 gt Value 6 545 Override 1 X Help BLU 12 11 APP 12 11 Grocery Land COR 12 11 BLU 12 11 APP 12 11 Food King COR 12 11 BLU 12 11 APP 12 11 COR 12 11 CASE 12 count Com Muffins Total gt Muffins gt Stuff Mart gt OAT 12 11 ni Total gt Muffins gt Sids Club gt COR 12 11 Total gt Muffins gt Sids Olub gt BRA 12 11 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan Total gt Muffins gt Sids Chib gt BLU 12 11 E History MME Forecasts EE Forecast Interval b COR 12 11 CASE 12 count Corn Muffins There are four rows in the example shown above Statistical contains the statistically based forecasts generated by Forecast Pro Unlimited prior to any overrides being applied Override I and Override 2 contain any overrides that you have entered for the current forecasts Proposed overrides are displayed in red committed overrides are displayed in black The Commit button is used to convert proposed overrides to committed overrides The Formula checkbox allows you to enter overrides as either formulas or hard numbers The
98. atistical analyst It performs a series of statistical tests interprets the results performs more tests if necessary and finally makes recommendations based upon the results Expert selection works well for most applications However Forecast Pro Unlimited also allows you to customize your forecasting approach by adding modifiers to the Navigator A modifier on a particular item gives Forecast Pro Unlimited instructions on how to create the forecasts for that item We will explore the use of modifiers in Lesson 2 Viewing the Forecast Report Let s take a closer look at Forecast Report view Turn off the Graph view by clicking its green icon Fi Forces fo Ui EOE Project03 i EN caso _x__ File Settings Operation Project Views Window Help 0060066 100 6 0 2 0008 Stuff Mart gt through 2012 gt 6 Holdout 0 Total ES Project03 Forecast Report Muffins Forecast Report for Stuff Mart gt Bie COR 12 11 BRA 12 11 Customer BLU 12 11 Total gt Muffins gt Stuff Mart APP 12 11 OAT 12 11 Expert Analysis Sids Club Grocery Land Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins Food King Cakes will perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 9 265 and for Box Jenkins was 17 579 The rolling out of sample test used a maximum horizon of
99. ats If you have chosen a format you need read only the pertinent section Spreadsheet Formats Forecast Pro Unlimited can read Excel XLS XLSX files Lotus WK1 WK3 and WK4 files and CSV Comma Separated Values files saved from Excel You must create your spreadsheet file from within your spreadsheet program Forecast Pro Unlimited checks data types as it reads the spreadsheet If it sees text where it expects a number or a floating point number where it expects an 118 Setting Up Your Data integer an error message will be displayed A blank cell is interpreted as a missing value Do not use zeros to represent missing values they will be interpreted as numbers and will probably distort your forecasts badly Entire spreadsheet vs named range You may either devote an entire worksheet to the data recommended or specify a portion of a worksheet by giving it the range name BFSDATA In a multi worksheet workbook the data are assumed to reside in the first topmost worksheet unless an alternate sheet has been specified by naming it BFSDATA The cell references in the examples below assume that the entire worksheet has been devoted to the Forecast Pro Unlimited database If you opt to specify a named range cell Al in the samples will correspond to the cell in the uppermost left corner of your named range Row format If your data are already stored by rows you will want to consider the row format first You can probably alt
100. base procedure begins in the same way However after the forecasts have been made the model is rolled forward by one period Forecasts are then made from the new base to the end of the withheld data This process is repeated until the withheld data sample is exhausted If 6 data points have been withheld then you obtain 6 1 step forecasts 5 2 step forecasts 4 3 step forecasts etc The model coefficients are not reestimated as each additional data point 1s assimilated The forecast model is based entirely upon the original fit set Setting Up the Script for Evaluation Forecast Pro Unlimited is shipped with data files containing the 111 series from the original M competition Annual contains 20 annual series Quarterly contains 23 quarterly series and Monthly contains 68 monthly series In this lesson we will compare the out of sample performance of two different forecasting techniques using the monthly data set The main idea of this facility in Forecast Pro Unlimited is to give you the opportunity to test options for time series from your own company This lets you tune Forecast Pro Unlimited to your data Click the red Script icon and on the first line enter M data Monthly Accept the script and then click the red Read Data icon to read in the data Set the holdout sample on the dialog bar to 6 Click the red Forecast icon to create the forecasts 102 Out of sample Testing Examining the Analytic Output After processing is comp
101. be saved Chapter 3 describes how to set up a Forecast Pro Unlimited script and also discusses the strategies that Forecast Pro Unlimited uses to produce consistent forecasts for hierarchical data Chapter 4 describes all available forecast modifiers and their functions Chapter 5 is a complete reference to Forecast Pro Unlimited menus options and commands Chapter 6 describes how Forecast Pro Unlimited reconciles forecast adjustments between different levels of the forecasting hierarchy The Appendixes describe how to speed up processing and provide other supplementary information Many users won t want to work their way through each and every part of this manual However we urge you to go through at least Chapters 1 3 of Getting Started Lesson 1 2 3 amp 4 of the Tutorial and as many other lessons as you want This will give you a good overview of Forecast Pro Unlimited operations and capabilities When you are ready to set up your own data please consult Chapter 1 of Part 3 Reference How to Use This Manual 5 Statistical Reference Manual PDF only The Forecast Pro Statistical Reference Manual describes the statistical techniques statistics and strategies that are implemented in Forecast Pro It is not necessary that you fully understand or even read this manual in order to produce accurate forecasts with the product The manual is provided in electronic format pdf When Forecast Pro Unlimited is installed the fi
102. bit operating system but would like to install the 32 bit version you will find instructions for doing so in the next section To install Forecast Pro Unlimited on your hard disk using FPSetup perform the following steps Run the FPSetup program as an Administrator The program is located in the root directory of the CD e g D Follow the directions that appear on the screen The installation program will prompt you for your serial number and CD Key These numbers are printed on the CD label and sleeve If you are installing from a download the numbers should have been included with the email that provided the download link Setup will then create the program directory data directories copy the appropriate files create a launch icon on the program menu and place a launch icon on the desktop It will also install SQLite drivers The driver installation launches a separate installation dialog which includes a separate click through license agreement If you have any difficulty installing Forecast Pro Unlimited please do not hesitate to contact BFS technical support phone 617 484 5050 email support forecastpro com If you wish to remove Forecast Pro Unlimited from your computer use the Add Remove Programs utility in the Windows Control Panel Manually Installing the 32 bit or 64 bit Version As we discussed in the previous section the FPSetup program automatically detects whether you are running a 32 bit or 64 bit opera
103. both row and transaction style and from databases using ODBC The sample file shown below is installed into the Forecast Pro Unlimited input directory and is named External Overrides for 123 Bakery KUI otha A Total Total Total Total Total Total Total Total Total 10 Total 11 Total 12 Total 13 Total 14 Total 15 Total 16 Total OONODOASf WH 17 Total 18 Total 19 Total 20 Total 21 Total 22 Total 23 Total 24 Total 25 26 27 fe B C Category Customer Muffins Stuff Mart Muffins Stuff Mart Muffins Sids Club Muffins Sids Club Muffins Food King Muffins Food King Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart Cakes Stuff Mart D SKU IA EEB iE H Merge amp Center 1823 Conditional Formatting Alignment Number E F Row Comment COR 12 11 Override 1 Increased for scheduled promo BRA 12 11 Override 2 Decreased cannibalization from COR 12 11 promo COR 12 11 Override 1 Increased for scheduled promo BRA 12 11 Override 2 Decreased cannibalization from COR 12 11 promo Muffins Grocery Land COR 12 11 Override 1 Increased for scheduled promo Muffins Grocery Land BLU 12 11 Override 2 Grocery Land will discontinue BLU 12 11 after Nov 2012 COR 12 11 Override 1 Increased for scheduled promo BLU 12 11 Override 2 Food King will discontinue BLU 12 11 after Feb 2013 VA 20 01 ST 20 02 LF 20 02 LE 20 02 CO 20 01 C
104. box allowing you to define new event codes and edit existing ones You can select an event code using the spinners or by clicking on it in the display grid After editing a description you click the Add button to update the display grid You can remove an event code by selecting it in the display grid and clicking the Remove button All modifications will have a status of Pending until you accept them using the Commit button The Exit button is used to close the Manage Event Codes dialog box and return to the event manager Menu Items and Dialog Boxes This section covers all of the Forecast Pro Unlimited menu items and their associated dialog boxes The File Menu The file menu is used to manipulate forecast project files save ODBC connections strings for use in command line operation print the currently displayed forecast report and to exit Forecast Pro Unlimited File gt New is used to open a new forecast project This task can also be accomplished using the blue New Project icon 0 File gt Open is used to open an existing forecast project This task can also be accomplished using the blue Open Project icon File gt Close is used to close the current forecast project File gt Save is used to save the current forecast project using the currently specified name This task can also be accomplished using the blue Save Project icon Menu Items and Dialog Boxes 181 File gt Save as is used to save and name the current forec
105. ch predicted Select Specified launch total and set it to 500000 Click OK to build the model Right click on the Graph view to invoke its context menu Add the fitted values to the graph by selecting Fitted Forecasting by Analogy 85 ES Forecast Pro Un caries fttit Project09 7 5 A OON So T File Settin ngs Operations Project View Wind SS OOO 001084 ab O18 ETT SAA Product 3 2012 E4 Ewou 202 He E s Produc NALOG _PROFILE 1 500 ES Projecto9 Graph duct 3 ANA OG _PROFILE 160 Product 3 Product launched 3 months ago Model Details User Defined ANALOG _PROFILE 1 500000 12 by Analogy ANALOG 621701 59 500000 12 2012 4 Analog Variable _Profiie 1 Read The forecast shows the sales now required to achieve the specified launch total The fit shows the historic volume that would normally be associated with the current forecast The green line shows the actual sales to date which in this example is substantially lower than the fit Right click Product 3 on the Navigator to invoke the context menu and then select Model gt By Analogy to return to the By Analogy dialog box Remove the check mark from the Specified launch total option and click OK to build the model using the estimated launch total Examine the results and then exit Forecast Pro Unlimited This ability to compare your specified launch totals with the estimated launch totals is quite powerful and will oft
106. cluding disks and printed materials and destroy all copies or if You downloaded the Software notify BFS in writing that You have removed the Software from your Computer and destroyed all copies If You do not comply with these return and notification requirements within thirty days 30 of your receipt of the Software You will not be entitled to a refund of any license fees You paid End user License Agreement 215 2 OWNERSHIP BFS retains title ownership and all rights and interests in and to the Software documentation and all other materials supplied by BFS BFS does not sell the Software or any copies thereof but only grants limited licenses to use the Software in accordance with the terms of this EULA 3 GRANT OF LICENSE Upon acceptance of this EULA BFS grants You a non transferable non exclusive limited right to use this copy of the Software You may use the Software and the associated documentation only in connection with one Computer You may physically move the Software from one Computer to another provided that the Software is used on only one Computer at a time You may not move the Software electronically from one Computer to another over a network This license is granted for use by an individual Authorized User and in no event shall there be more than one Authorized User on the Computer where the Software is installed e g there shall be no common sharing of a Forecast Pro computer Each Authorized User mus
107. correlations of the data and extrapolating them forward It often outperforms exponential smoothing in cases when the data are fairly long and nonvolatile However it doesn t usually perform as well when the data are statistically messy You can use Forecast Pro Unlimited s expert selection to automatically choose the appropriate forecasting technique for each item forecasted Alternatively you can dictate that a specific method be used If you are already familiar with statistical forecasting you can use Forecast Pro Unlimited to customize your models It provides extensive diagnostics and statistical tests to help you make informed decisions Forecast Pro Unlimited includes three additional forecasting techniques that are not considered in expert selection event models forecasting by analogy and the Bass diffusion model Event Models are extensions of exponential smoothing models that allow you to capture responses promotions business interruption and other aperiodic events These models allow you to assign each period into logical categories and incorporate an adjustment for each category For example if you establish a category for promoted months then your model would include an adjustment for promoted months If you ran three different types of promotions you could establish three categories and have a different adjustment for each type of promotion Forecasting by Analogy is a new product forecasting technique that allows you to
108. create a forecast that looks like a different product s demand pattern or a launch profile that you create 14 A Quick Overview of Forecasting Bass Diffusion Model is a new product forecasting technique designed to forecast the spread of a new technology product or method based on the adoption rates of two types of users innovators who are driven by their desire to try new products and imitators who are primarily influenced by the behavior of their peers If you are new to forecasting and these techniques seem a little intimidating don t worry We designed Forecast Pro Unlimited to guide you completely through the forecasting process Just follow the program s advice all the way to accurate forecasts Some Forecasting Tips Forecast Pro Unlimited uses the history of your data to forecast the future Thus it is extremely important that your data be as accurate and as complete as possible Keep in mind the rule Garbage in garbage out You will also want to give some thought to what data you should forecast If you want to forecast demand for your product you should probably input and forecast incoming orders rather than shipments which are subject to production delays warehousing effects labor scheduling etc Many corporations are making large investments to obtain data as close to true demand as possible The more data you can supply the program the better The program can work with as few as five data points but the
109. d Script icon 9 and create a script containing the three lines Hardware USA Hardware CAN Hardware MEX These were the data files used to create the three component projects Click OK to accept the script Read in the data expand the Navigator and open the graph window Your project should now look like the one below 5 Forecast Pro Unlimited 64 bit Project02 ON A bal File Settings Operations Project View Window Help 05605686082 O0 96 ough 2012 211 Hoo 0 E E GS Project02 Graph 3 PG1 204 1 Total Total PG1 204 5 3 Mexico PG1 204 1 PG1 204 2 PG1 204 3 PG1 204 4 I PG1 204 5 ES Project02 Forecast Report o lolz Forecast Report for Total pee Total A re forecast is pending for Total Notice that by reading in all three data files we ve created a project that contains all three countries If we wanted to recreate the forecasts from the individual component projects into a consolidated project one way to do so would be to import the forecast modifiers and overrides from each component project into our current project using Project gt Import gt Overrides From and Project gt Import gt Modifiers From This approach would work however it would be quite cumbersome The Project Manager in Forecast Pro Unlimited is designed to streamline this type of consolidation It allows you to create a new project which combines the component project
110. d report and save it to Excel The Outliers tab of the Settings gt Options dialog box includes an Jnclude iteration statistics in reports option If this option is active the outlier report will include detailed statistics describing the outlier detection Consult the Forecast Pro Statistical Reference Manual for details The Numeric Output View The Numeric Output view displays the contents and format of the currently specified Numeric Output file When designing the numeric output it is useful to have the Numeric Output view open Selecting Settings gt Numeric Output Design opens the Numeric Output Design dialog box which is used to specify the format and content of the Numeric Output file and the Numeric Output view The Numeric Output Design dialog box contains both a Set as Default button and an OK button Clicking the OK button will save your current settings for use with the current project Clicking the Set as Default button will save your current settings for use with the current project and also save them as the default settings for all new projects The Numeric Output Design dialog box contains three pages or tabs We will discuss each tab in turn 176 Command Reference Forecast Pro Unlimited 64 bit Project04 5 x3 0065566406604 M0086 COR 12 11 2007 An emn E Holdout 0 3 Total i GS Project04 Numeric Output ol a ee Wi2tul 2012 Aug 2012 Sep 2012 0ct 2012Nov 2012Dec 2013Jan 2013Feb 2013Mar
111. d textbooks include J S Armstrong 2001 Principles of Forecasting A Handbook for Researchers and Practitioners Norwell MA Kluwer Academic Publishers K Kahn 2006 New Product Forecasting An Applied Approach Armonk NY M E Sharpe S Makridakis S C Wheelwright and R J Hyndman 1998 Forecasting Methods and Applications Third Edition New York Wiley K Ord and R Fildes 2013 Principles of Business Forecasting Cengage P Newbold and T Bos 1990 Introductory Business Forecasting Cincinnati South Western Suggested Reading 219 Index ANALOG 154 ARIMA 151 BASS 154 BJ 151 CFIT 153 CFIT 153 EXPO 153 GROW 153 LINE 153 QUAD 153 CONST 151 DISCRETE 151 EVENT 155 156 EXSM 150 EXSMG 150 155 FIXED 153 HOLT 150 INDEXES 76 146 147 158 INTER 152 OUTLIER 157 POW 159 SALY 152 SALYDI 153 SALYDP 153 SALYI 152 SALYP 152 SIMPLE 150 SMAG 152 YTOPDOWN 75 77 145 146 147 158 WINTERS 150 XY 151 155 1 2 3 117 118 Adjustment mode 187 Allow disaggregation 187 Allow negative forecasts 183 Automatic recalculation 191 Bass Diffusion model 15 86 modifiers 154 Bottom up 74 Box Jenkins 14 modifiers 151 221 By Analogy 83 modifiers 154 Cannibalization 71 78 Cascade 197 Check for updates 198 Close 181 Code page 185 Column delimiter 184 Comma delimited files 184 Command line dialog box 188 Command line oper
112. do Oo Total B Muffins B Stuff Mart COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 Grocery Land COR 12 11 BLU 12 11 APP 12 11 amp Food King COR 12 11 BLU 12 11 APP 12 11 e Cakes Stuff Mart VA 20 01 ST 20 02 Notice that a total of 6 outliers have been detected and their current Status 1s Detected Correcting the Outliers Open the Graph view and double click on the first item listed on the outlier report Your display should now match the one shown below ES Forecast Pro Unlimited 64 bit Projecti ee lem Se File Settings Operations Project View Window Help COR 12 11 2007 1 gt through 2012 gt Holdout 0 Total B Muffins a B Stuff Mart COR 12 11 CASE 12 count Corn Muffins COR 12 11 BRA 12 11 BLU 12 11 E APP 12 11 5 OAT 12 11 B Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 Grocery Land o RISTET 2010 Jan 2011 Jan 2012 Jan 2013 Jan BLU 12 11 x E Corrected History HM Forecasts MM Forecast Interval APP 12 11 Food King COR 12 11 BLU 12 11 APP 12 11 Cakes B Stuff Mart VA 20 01 ST 20 02 98 Detecting and Correcting Outliers Notice that when you double clicked an item on the outlier report the Navigator jumps directly to that item Thus you
113. dsscsuneseenpencteucedestaenntiacaues 11 Forecasting Methodologies sneri i 13 OME EH One CAST TIP aaa a eee wd a a 15 TUTORIAL Fhe BASICS osnan aaa aaa aa beac aa aeaa aaaea 19 The Marnm Mentiin E A acces niehe 19 RTO VE VIC W A vac E TAAA T E A E A A EE 21 SEMIS TNS DeU Si mea eaqeacodasegsraten dota muaeamuceereawts 21 DEMAS TIE SC be is aactass hen a a a 23 Readies 1 the Dat ais gos scciacisiee e n a a a a kce ee aotiies 24 Generalne Me FP ORCCASIS sie steve acaiitaccoanaesieniwnce cece E 26 Viewing the Forecast REPOM scisectestancidasigeddtassandiausiiecNaansandavenddiaxesootlavmeaass 27 Customizn othe Graph VICW iseni E ania 29 OVveridins Me Forecasts sorier ea EEE 31 W orkime Wira HOt Wis ioe debiaseeoeritie bashes nceaear ease nese att 33 Savine HCP OFC CASIS oaran e E E cuacwnaedsaacnspeeiaint 35 Say ie E Proti asrorin a a a a A 38 Usine Forecast Modifiers scccsseticsexscpsssasusteceiseceecsawesdsesl soose nibere sibs nse 39 Specifying Forecast Modifiers for Individual Items 0eeseneenennessseeeeessss 39 Specifying Forecast Modifiers for Multiple Items ce eeceeecceeeeeeeeeeees 4 Specifying Custom Forecast Modifiers 0 0 0 0 ccseeeseeecceeeeeeeeeeesseceeeeeeeeeeeees 42 Updating a Forecast Project sscgcssiccsccccseesicssicccecuseaveddsseccecousnessecssececeousnevensds 43 Defining the Forecasting Process ccccccccccssssseseeeeeececceaaeneeeceeeeeeeaensseseeees 43 Step One Updating Your Data Piles csjccois
114. dual graph component History Corrected History Forecast Confidence Limits Statistical Forecasts Fitted Values and Historic Intervals can be toggled on or off Select Graph Settings The Graph Settings dialog box allows you to customize your graph in numerous ways The Include tab allows you to toggle the forecast related components on and off Select the Components tab 30 The Basics Type 123 Bakery Inc into the Title field and click the Apply button Notice that the title has been added to the graph Clicking the Apply button implements your current selection without leaving the Graph Settings dialog box Clicking OK implements your current selection and exits the dialog box Forecast Pro Unlimited supports two types of graphs time series and year over year Select Year over Year Notice that the titles that we had specified for the time series graph have disappeared Select Time Series Notice that the titles are back Because the graph types are distinctly different Forecast Pro Unlimited maintains their formatting separately When you are viewing a time series graph you have the option of displaying all of the data in a nonscrollable display or zooming in and graphing a subset of the data Remove the check from the AlN option and click OK Notice that the graph now displays 36 data points and 1s scrollable Use the horizontal scrollbar to scroll through the display S OO at
115. e The more regular the series the more accurate the forecasts The simple moving average is widely used in business mostly because it is so easy to implement However it is really only appropriate for very short or very irregular data sets where statistical features like trend and seasonality cannot be meaningfully determined Discrete data models are used for data consisting of small whole numbers These models are characteristically used to model a slow moving item for which most orders are for only one piece at a time Forecasts are nontrended and nonseasonal Croston s intermittent demand model is not a widely known or used technique but in certain circumstances it is extremely useful It 1s usually used to model Forecasting Methodologies 13 data in which a significant number of periods have zero demand but the non zero orders may be substantial This is characteristic of a slow moving item which is ordered to restock a downstream inventory Forecasts are nontrended and nonseasonal Exponential smoothing models are widely applicable They are also widely used because of their simplicity accuracy and ease of use Their robustness makes them ideal even when the data are short and or volatile Exponential smoothing works by identifying and extracting trend and seasonality and extrapolating them forward Box Jenkins is a more elaborate statistical method than exponential smoothing Box Jenkins works by capturing the historic
116. e Rolling Evaluation and Out of Sample Static Evaluation not currently active list the out of sample statistics that are generated when a holdout analysis is performed Outliers not currently active lists any detected and or corrected outliers Overrides displays any overrides and or comments that were entered Forecast Report Design Include Historic Data Forecast Data Within Sample Out of sample Stats Report Styles Components Forecast Only pern Basic Standard Complete Custom v include graph in output Right click on the Forecast Report view to invoke its context menu Select Forecast Report Design Notice that this dialog box allows you to select a standardized report style or create a custom one Select Forecast Only and click OK 28 The Basics Notice that this report is much simpler that the standard one Return to the Forecast Report Design dialog box and experiment with the settings After you are comfortable with their operation edit the settings to display the Standard report style and click OK Customizing the Graph View Let s now explore some of the graphical options Display the Graph view by clicking its green icon Turn off the Forecast Report view by clicking its green icon Your display should now match the one shown below 5 Forecast Pro Unlimited 64 bit Project03 IN A _ bale File Sais Soto Project View Window Help m p 0066565664 066 04 6 OOS Stuff Mart 200
117. e file containing separate tables for the in place overrides comments forecast modifiers and Hot List The 64 bit version of Forecast Pro Unlimited will always use SQLite database files The 32 bit version can use either and you can specify which database file type to use on the Advanced tab of the Options dialog box The setting can only be changed on a new project prior to reading in the data The Project Snapshot File cb is a binary file that saves the forecast components that are currently in memory e g the forecasts summary Statistics etc so that the session can be restored without having to read in the Forecast Projects 137 data recalculate the forecasts etc This allows you to return to your session where you left off and to share the session with others When sharing projects with others you need to provide all three files Zipped vs unzipped projects Forecast Pro Unlimited allows you to save projects in an unzipped form This is usually not recommended unless there is a specific issue with your operating environment that makes the unzipped format preferable In networked environments working with zipped projects usually offers better performance When you open a zipped project Forecast Pro Unlimited copies the zipped file from the network drive to a local workspace unzips the project files and opens the project allowing you to work on your project locally even though it was saved to a network drive When you
118. e permitted 158 Using Forecast Modifiers Custom Modifier POW key Use a Box Cox power transformation Key may equal LOG SQRT INVERSE or any decimal number from 1 0 to 1 0 If you enter POW AUTO Forecast Pro Unlimited will test your data and implement an appropriate Box Cox transformation or none at all Consult the Forecast Pro Statistical Reference Manual for a discussion of the Box Cox power transformations Miscellaneous Custom Modifiers 159 Chapter 5 Command Reference This chapter presents a command overview a description of the user interface a detailed description of each menu command and instructions on how to drive the program from the command line Operations Overview To prepare forecasts from Forecast Pro Unlimited you must follow the following procedure Prepare the database Specify the data format and output options This is accomplished using the Settings menu Options set by the user will apply to the current forecast document and can also be saved to the ForecastProUnlimited ini file and used as defaults for all future forecast documents using the Set as Default button Thus you need only set the options when you use Forecast Pro Unlimited for the first time or when you wish to change the current settings Create the script The script is a list of the data files to be forecasted It is created using the Define Script dialog box which can be accessed from Operations gt Script or via the red
119. e result is that seasonality is accounted for at the LINE level This is desirable when the SKU s are likely to have similar seasonal patterns but the data are too irregular for accurate estimation of seasonal indexes at the SKU level This concludes Lesson 7 Short lived Products 79 Lesson 8 New Product Forecasting In this lesson you will explore different approaches to forecasting new products The lesson begins by examining some of the options available in Forecast Pro Unlimited for generating forecasts prior to the product being launched 1 e when historic data are not yet available It then illustrates how to apply two forecasting methods designed specifically for forecasting new products forecasting by analogy and the Bass model Working With No Data Start the program click the red Script icon and select New Product Data Accept the script read in the data forecast the data open the graph view and fully expand the Navigator Your screen should now look like the one shown below 81 ES Forecast Pro Unlimited 64 bit Projectol 0 bk 3 i Gh i b File Settings Operations Project View Window H 00655664086 0 00006 Product O 4 through 2012 6 Product 0 Product 3 Product 0 Product has not yet launched p Forecast Report for Product 0 SERS A S Product has not yet launch ed Product 0 Raw hierarchy is Product 0 Item Product 0 is a new product Exp
120. e sample Access database file 23 Bakery ODBC mdb located in the Forecast Pro Unlimited input directory Formatting rules A header row is required The Row and Comment fields must be present and labeled accordingly The dates in the header row need to be either in an Excel format or in a Year Period format e g 201 1 July or 2011 52 Overrides can be assigned at any level The override row can be specified by either the row number or the row name Overrides can be entered as values or formulas If an item has no overrides it does not need to be included in the spreadsheet Modifier Files In addition to entering forecast modifiers interactively on the Navigator Forecast Pro Unlimited allows you to import modifiers from other Forecast Pro Unlimited projects and from Excel spreadsheets 132 Setting Up Your Data Importing modifiers from Excel requires that you set up the spreadsheet in a specific formats format The sample file shown below is installed into the Forecast Pro Unlimited input directory and is named External Modifiers for 123 Bakery xls x B I gt External Modifiers for 123 Bakery Compatibility Modelo Microsoft Excel Lo aXe ome Page Layout Formulas Data Review View Add Ins AbleBits com N Q o op s Cut a j e eae T tEh E AutoSum Arial 710 A A z Xr a Wrap Text Genera I k HA Lf 7m a E il gru d A J Format Painter BlUr Hy DXA BBW EE Bimergeacenter HS 58 Conanionat Toan
121. e scaling Automatic allows Forecast Pro Unlimited to select the Y axis scale The Graph View 171 Custom lets you set the minimum and maximum for the Y axis scale Include zero begins the y axis at zero or at the minimum negative value Relative scaling is only relevant when you are graphing more than one variable If it is on each variable will be displayed on its own scale If it is off all variables will be displayed on the same scale It is important to know whether relative scaling is on or off when you interpret the graph sph etn Te Se Include Components Layout tems Style Line Colors and Widths Line Variable 1 3 D line Column 3 D column Variable 3 Variable 2 Include V Grid lines 7 Legend Forecasts Show points Confidence limits Show Ancestry Corrected history amp Bei E RR RE RE Set as Default Most of the options in the Layout tab are self explanatory The Style section allows you to set the graph style The Line Colors and Widths section allows you to specify the line colors and widths for the different variables and forecast components displayed The nclude section allows you to toggle on or off various components of the graph If the Show Ancestry option is selected and the variable name is displayed on the graph the variable name will appear preceded by any applicable parent group names O i EEE gt aa a a ah ooo O CA 5555558
122. e the by analogy model with a specified launch total of A a specified launch horizon of B and a specified launch date with a starting year of C and starting date of D This option is only available when the series being forecasted has no historic data 154 Using Forecast Modifiers Event Model Modifiers To build an event model you must tell the program when events of each type occur To do this you must construct an event schedule which classifies each period by event type O no event 1 event of type 1 2 event of type 2 etc You can create event schedules interactively using the Event Manager or create them external to Forecast Pro Unlimited and import them using Project gt Import gt Helpers From For examples of constructing event variables and building event models consult Building Event Models in the tutorial section For details on using the Event Manager consult The Event Manager in the command reference section For statistical details consult the section on exponential smoothing in the Forecast Pro Statistical Reference Manual The following modifiers are associated with event models Events gt Select EVENT _X Use an event model _X is the name of the time series containing the event schedule Model gt Exponential Smoothing gt Custom EXSM XYZ Use an exponential smoothing model with trend type X N no trend L linear trend D damped trend E exponential Forecast Pro decides seasonality type Y N nonseasonal M mu
123. e user will be used for the current forecast project You can also save your selections as the default for future projects Create the script The script is a list of the data files to be forecasted It is created using the Define Script dialog box Select Operations gt Read Data Forecast Pro Unlimited will then read the data from disk into RAM and display the starting and ending dates for the forecast run on the dialog bar Select Operations gt Forecast The software will then execute the current script to prepare the forecasts Once the forecasts have been created you may view them graphically adjust them and save them to disk The remainder of this lesson will guide you through steps 2 5 Setting the Defaults To set the default options click the light blue Options icon which will open the Options dialog box shown below An Overview 21 Options Basic Formats Outliers Ovemides Command Line Pareto Analysis Advanced Controls File Settings input Data C Users Public Documents Forecast Pro Uniimited input Browse Projects C Users Public Documents Forecast Pro Uniimited Projects Browse Output C Users Public Documents Forecast Pro Uniimited Output Browse Allow negative forecasts Upper confidence lima 97 5 Forecast horizon 12 gt Lower confidence lima 2 5 Safety stock leadtime 3 There are seven pages of options on the dialog box accessible via the tabs The more commonly changed options are found on t
124. ear 12 12 Periods Per Cycle 12 12 Nov 02 Dec 02 Jan 03 Feb 03 Mar 03 Apr 03 May 03 t 4 gt gt Sheeti 3 2 3 4 5 6 T 8 9 The above example does not use attribute fields to define product groupings This is often desirable and is discussed in the Using Attribute Fields to Define a Hierarchy section Spreadsheet Formats 121 In our example each data record consists of six header items in rows 1 through 6 followed by the historic data in remainder of the rows beginning in row 7 Each item is placed in a separate cell Rows through 6 contain the following six required items Variable name Up to 256 characters Variable description Up to 256 characters Starting year Must be an integer Starting period Must be an integer Periods per year Must be an integer Nn A A W N e Periods per seasonal cycle Must be an integer See the Overview section at the beginning of this chapter for more details on these items The time series data begin in row 7 The starting year row 3 and starting period row 4 refer to the year and period for row 7 whether or not that cell actually contains data Thus in the example spreadsheet the first value for PG1 204 2 is for January 2003 in row 9 even though the header defines the starting period as 11 and the starting year as 2002 Formatting rules Keep the following points in mind when you are creating your spreadsheet If you are not using attribute fields e
125. eb 08 Mar 08 Apr 08 May 08 Jun 08 Jul08 Aug 08 Sep 2 Total Camera yCamera Variable Format Camera 2008 112 12 6530 8260 8480 7430 5990 10980 5370 4570 109 3 Total Camera iCamera Instant Camera 2008 112 12 6340 7951 7538 8187 5752 7692 3684 6087 95 4 Total Film vFormat_Film Variable Format Camera Film 2008 112 12 6642 9056 23053 13772 15064 26909 11357 12878 335 5 Total Film iCamera_Film Instant Camera Film 2008 112 12 37490 84035 168457 93379 110990 258906 52297 78972 2627 6 Total Film ASA100_BW 100 ASA Black amp White Film 2008 1 12 12 56647 57211 87869 90175 79662 112503 80798 74108 896 7 Total Film ASA100_Color 100 ASA Color Film 2008 1 12 12 59484 58549 104973 80898 81580 136199 87090 98235 1670 9 10 1 14 5 16 7 19 20 21 24 25 26 27 6 4 4 gt gt i TOTAL PHOTO m4 fi Ready G 12 C The spreadsheet Presto Camera Company xls is shown above In this example we defined the groups Total Camera and Film directly in the spreadsheet using attribute fields columns A and B If we had included additional attribute fields we would have created a larger hierarchy Consult the Setting Up Your Data section of this manual for complete details 76 Building Multiple Level Models Combining Multiple Level and Event Adjustment Models In many cases the SKU s or product lines in a multiple level hierarchy are subject to promotional effects You can use the event model methodology described in Lesson 5 to account for such
126. ecastint aanroer e a 81 AW Okie WIth ING DD ata asses edctaadsts cosets vacsies pe tevaa ethan co ecneds aes snmerd nade etencees 81 Forecaste DY ANIOS Y saaie a a le aa 83 Usmo the Bass NOdel os siciatu set iecaccnne riers Si hacia a e he kectuph sonatas 86 Using Weighting Transformations cccccccssssscssccccssssssssssssccccscscsssssssees 89 Adj s ne Tora Vs Week Periods eaii craton tana een 89 Other Uses for Weighting Transformations cccccccccccccceseeeeeeeeeeeeeeeeeeeees 92 Detecting and Correcting Outliers ccccssssscssccccssssssssssscccccsssssssssesees 95 How Outlier Detection and Correction Works cccccssseeeeeceeeeeeeaaeseeeeeees 96 Reviewing the Outliers siressa a aa 97 Correcting the Outlets csin o E A 98 OUt OF Sample Tesina ac ceccsecccczeaasinesicdececeseccevecsscccatensecsusseeieterssuuentsseecesteeeks 101 setting Up the Script Tor EvaluatiOniss pnceseiviciieieiabieoeiiabdebnaoetaiaanaks 102 Examining the Analytic Output ccccccsssssssseeecccccseeesseesccessaeeesseseeeees 103 Compatins anm Alternative MOG gai eiereecivativuanc ne n 104 Operating From the Command Line ssssssssssscscccccccccccsccsssssssses 107 Command line Operate Oi sssi E A 107 REFERENCE vi Selimo Up Y OU DACA assscsvsctesietis eteestesasavesageucousasincetestedenneacesauesaevacauserenaeaes 113 OV CUNO caste ha hanes ating an rata cette ceo heute lhe ease 113 Selecting a Data F
127. ed to select individual items that you wish to view The Forecast Report window is used to display the forecasting model within sample statistics historic data and forecasts The Forecast Report window is one of three context sensitive views A graph view will become available after data has been read in An override view will become available after forecasts have been generated Active views display information for the item currently selected on the Navigator When more than one view is active the program will tile them The views are toggled on or off using the green icons or the View menu Four additional noncontext sensitive views are also available the item report view the override report view the outlier report view and the numeric output 20 The Basics view These views display information for all items forecasted and are toggled on or off using the yellow icons or the View menu An Overview Running Forecast Pro Unlimited consists of executing the following five Steps l Prepare the database This is performed outside of the program and entails selecting the type of data format to use and preparing the files Creating your data files is discussed in the first chapter of the Reference section For this lesson you will use sample data files provided with the package Specify the data format and default options This is accomplished by selecting the appropriate entries from the Options dialog box All options set by th
128. ed to use a Winters exponential smoothing model for this item rather than expert selection Examine the forecast report to verify that the Winters model was used You ll notice that the Expert Analysis section is no longer present and that the Model Details section indicates that a User Defined WINTERS model was built Select Total gt USA gt PG1 204 4 on the Navigator Right click to call up the context menu and select Model gt Very Simple Models gt Same as Last Year gt Plus Percent Specify the percentage as 10 and click OK Notice that SALYP 10 now appears next to Total gt USA gt PG1 204 4 on the Navigator This model will set the forecasts to equal the same values as the preceding year plus 10 Specifying Forecast Modifiers for Multiple Items Select the group Total gt Canada on the Navigator Right click to call up the context menu and select Model gt Box Jenkins gt Auto Notice that BJ now appears to the right of the group Total gt Canada Specifying Forecast Modifiers for Multiple Items 41 Let s say that we wish to dictate that a Box Jenkins model be used for every item in the group Canada To accomplish this select Apply Modifier s To gt Children on the Navigator s context menu Notice that the BJ modifier now appears on all of Total gt Canada s children 1 e all items one level down in the group Total gt Canada Specifying Custom Forecast Modifiers In addition to the commonly used forecast
129. eholders For a more complete discussion on the handling of missing data and the distinction between a zero value and a missing value please refer to the Missing Values and Zeros section in the Setting Up Your Data chapter Ignore trailing zeros If this option is selected then trailing zeros after the last nonzero data point will be ignored 1 e the data has ended and the zeros are 184 Command Reference interpreted as placeholders This means that the time series would be considered dead in multiple level scripts and not forecasted In nonmultiple level scripts the forecasts for the time series would begin after the last nonzero point For a more complete discussion on the handling of missing data and the distinction between a zero value and a missing value please refer to the Missing Values and Zeros section in the Setting Up Your Data chapter Missing Values Specify how you wish the program to treat missing values The options are truncate the data set 1 e discard all data that precedes the missing value impute the missing data or set missing data points to zero Regardless of how this option is set missing values that appear prior to the first data point are ignored For a more complete discussion on the handling of missing data and the distinction between a zero value and a missing value please refer to the Missing Values and Zeros section in the chapter entitled Setting Up Your Data Include group totals for data files
130. eld 1s defined as FLOAT not NUMBER All other numeric fields can be NUMBER with the decimal places set to zero Using Attribute Fields to Define a Hierarchy If you do not include any attribute fields when you read the data into Forecast Pro Unlimited it will create a one level hierarchy 1 e there will be no group totals If your data file table or query includes attribute fields prior to the Variable Name field Forecast Pro Unlimited will automatically build a multiple level hierarchy The first level of the hierarchy will correspond to the first attribute field the second level of the forecasting hierarchy will correspond to the second attribute field etc Let s illustrate this with an example The spreadsheet 23 Bakery xls is a sample data file shipped with Forecast Pro Unlimited It is shown below 128 Setting Up Your Data x iW i rr Bakery Compatibility Mode Microsoft Excel Si p ome I Page Layout Formulas Dat Review View Add Ins AbleBits com 9 o P x BS85 f A B C D E G H J K L M H 1 Total Category Customer SKU Description Starting Year Starting Period Periods Per Year Periods Per Cycle Jan 07 Feb 07 Mar 07 Apr 07 Mi 2 Total Muffins Stuff Mart COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 3 Total Muffins Stuff Mart BRA 12 11 CASE 12 count Bran Muffins 2007 1 12 12 20829 72576 11 016 0 4 Total Muffins Stuff Mart BLU 12 11 CASE 12 count Blueberry Muffins 2007 1 12 12 5 Total Muffins
131. els gt Same as Last Year gt No Change SALY Set each forecasted value to equal the value for the same period last year either history or forecast as the case may be Model gt Very Simple Models gt Same as Last Year gt Plus Percent SALYP n Set each forecasted value to equal the value for the same period last year plus the specified percentage n Model gt Very Simple Models gt Same as Last Year gt Plus Increment SALY n Set each forecasted value to equal the value for the same period last year plus the specified increment 7 152 Using Forecast Modifiers Model gt Very Simple Models gt Same as Last Year gt Plus Delta Percent SALYDP Set each forecasted value to equal the value for the same period last year adjusted by the percentage change between the value for the same period last year and the same period two years ago Model gt Very Simple Models gt Same as Last Year gt Plus Delta Increment SALYDI Set each forecasted value to equal the value for the same period last year adjusted by the unit change between the value for the same period last year and the same period two years ago Model gt Very Simple Models gt Fixed Forecast Value F XED n Set each forecasted value to n Forecast Fixed Value After B LW mesm Set forecasts to after 2003 ETE Model gt Very Simple Models gt Fixed Forecast Value WIXEDAFT Year Period n Set each forecasted value which falls after the year and period specified to n Cur
132. en illustrate the need to revisit your assumptions as the actual demand comes in Exit Forecast Pro Unlimited Using the Bass Model In this exercise we ll create forecasts for a new product using the Bass diffusion model The Bass model is most often used to forecast first time purchases of new to world products 86 New Product Forecasting The model tries to capture the adoption rates of two types of users innovators and imitators Innovators are early adopters of new products and are driven by their desire to try new technology Imitators are more wary of new technology they tend to adopt only after receiving feedback from others The Bass model uses two coefficients to quantify the adoption rates The Coefficient of Innovation referred to in the literature as p controls the rate for the innovators The Coefficient of Imitation referred to in the literature as 66 99 q controls the rate for the imitators If you have 5 or more historic data points these coefficients can be fit to the data To build a Bass model with fewer than 5 data points you must set the values for these coefficients along with the total number of potential adopters In this exercise we will look at two examples one where no data are available for the new product and the other where the initial 6 years of adoptions are known Start the program click the red Script icon and select Home Electronic Product Accept the script read in the
133. en we made our override to Total gt Muffins gt Stuff Mart this impacted the groups above our selection and all groups and items below our selection The Reference section of this manual describes how the reconciliation is performed Important If you restrict your overrides to a single level of the hierarchy the reconciliation process is simple and intuitive We strongly urge you to limit your overrides to a single level if at all possible We have illustrated the basics of the override facility There is a considerable amount of additional functionality including the ability to associate comments with override cells the ability to add and remove override rows the ability to name override rows the ability to make overrides on the graph using your mouse the ability to enter overrides as formulas the ability to view the history and the ability to make incremental adjustments to the Statistical Forecast row rather than overriding the values All of this functionality is described in the Reference section of this manual Turn off the Override view by clicking its green icon Working With a Hot List The Hot List is the currently empty box located in the bottom left hand corner of the screen below the Navigator Placing items on the Hot List allows you to efficiently navigate and work with a subset of your items Right click on the Navigator to invoke the Navigator s context menu Select Expand All to fully expand the Navigator Dra
134. ent schedules Close the project by selecting File gt Close The program will ask you if you wish to save changes to the current project click No Modeling Weekly Data Select File gt Open and open the project Tutorial 6 beer In this exercise we will model weekly beer sales for a brand of beer in various package configurations Select C 6 on the Navigator C 6 represents sales of beer packaged in cans and sold in 6 packs In order to get a better view of the data right click the Graph view to invoke its context menu and select Graph Settings Open the Components tab remove the checkmark for All set Periods to 156 and click OK Note that the display is now scrollable Periods allows you to select how many data points will be shown on screen when the All option is not selected Add the fitted values to the graph using the graph s context menu Modeling Weekly Data 67 SS Forecast Pro Unlimited 64 bit Tutorial 6 beer j z a LA File Settings creat Proj View Window Help 06055664064 04 9 OO 46 c6 2007 1 through 2013 34 gt Holdout 0 J Can ES Tutorial 6 beer Graph C 6 6 Packs 12 Ounce Cans _Holidays Ready One noticeable feature of this data set is that sales for the weeks containing the three US summer holidays Memorial Day 4th of July Labor Day are higher than other weeks If you look closely at the data you Il notice that these holidays so
135. er your spreadsheet to the Forecast Pro Unlimited row layout in just a few minutes In row format each time series occupies a single row on the spreadsheet The data are assumed to reside in the topmost first spreadsheet in the workbook unless an alternate sheet has been specified by naming it BFSDATA Row 1 of the spreadsheet is devoted to column headings The keyword description must be used as the column heading for the description column The other cells in row 1 are ignored by Forecast Pro Unlimited You can use them for titles calendar information etc Here is an example of a row format spreadsheet Spreadsheet Formats 119 Ox HD S SKUs manual XLS Compatibility Mode Microsoft Excel Home Insert Page Layout Formulas Data Review View Add Ins 5x ix 1 lt ike z 3 T amp Ata J0 ea alo S General Conditional Formatting Insert ON BH E x Format as Tabie 3 Delete g A Paste bids 3 ANS Sot amp Find amp sey B 7 UB o A7 E E ae E H e o 5 Cell Styles lFormat lt 27 Filter Select Clipboard Font fa Alignment ail Number M Styles Celis Editing AE14 an fx wi A B n D E ula F G l H _ Jj K Lii 1 Variable Name Description Starting Year Starting Period Periods Per Year Periods Per Cycle Nov 02 Dec 02 Jan 03 Feb 03 Mar 03 Apr 03 2 PG1 204 1 2 Bolt Anchors 2002 11 12 12 24 18 39 23 25 24 d 3 PG1 204 2 4 Bolt Anch
136. ert Analysis The time series consists of 0 data points I wil forecast 0 Ready Notice that Product 0 has no demand history By default Forecast Pro Unlimited will generate a forecast of zero for a time series with no history Notice also the confidence limits are set equal to the forecasts The first forecast period is established by the script as a whole in this example July 2012 One option is to use the override facility to enter the desired forecast in the form of an override Another option is to use the fixed forecast value model This model allows you to set the statistical forecast to a specific value Right click Product 0 on the Navigator to invoke the context menu and then select Model gt Very Simple Models gt Fixed Forecast Value Wey sane modes M himni A dialog box will appear allowing you to specify the value Set the value to 500 and click OK Examine the Graph and Forecast Report views to verify that the forecast is now set to 500 82 New Product Forecasting A related modeling option to Fixed Forecast Value is Fixed Value After This option is used when you wish to set the statistical forecast to a specific value after a specific point in time This can be useful when you are discontinuing a product and wish to set the forecast to zero part way through the forecast horizon or for a new product that won t come on line until part way through the forecast horizon For our example let s s
137. ete Format Sot amp Find amp lt 2 Clear Filter Select Editing v 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 201 12000 3500 5550 4325 3560 15075 16010 7100 18250 21500 20000 23900 22850 5000 8500 9550 9110 6000 6000 6000 34000 36550 29100 9500 12220 11150 BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA BASE 2 BASE 3 BASE 4 BASE 4 BASE 4 BA O 120 Override Files 131 The first columns A through D in our example define the attributes and name of the item 1 e the hierarchy information The next column defines the override row to which the changes should be applied followed by a column for comments which naturally populates the comment field Finally the overrides themselves appear from left to right starting with the first forecast period If a specific cell is blank no override will be imported for that period If you plan to import your overrides using a transaction style spreadsheet examine the sample file External Overrides for 123 Bakery Transactions xls located in the Forecast Pro Unlimited input directory If you plan to import your overrides using ODBC examine the External Overrides table in th
138. ew value into one of the override row cells or by using the right mouse button to drag it to the desired new value on the graph After you have entered the desired overrides and comments click the Commit button to accept the changes and reconcile the hierarchy For large complex hierarchies the reconciliation can take a little time To minimize the reconciliation time Forecast Pro Unlimited supports a manual override mode When this mode 1s active the override window will include a Retain button as well as a Commit Button The Retain button is used to accept overrides without reconciling the hierarchy In this mode you would typically enter and retain all of the overrides you wish to make 1 e for multiple items and then click Commit to perform the reconciliation The control to turn on 174 Command Reference manual override mode is found on the Overrides tab of the Settings gt Options dialog box The Item Report View The item report can contain Pareto information statistical output such as the forecasting model specification and summary statistics as well as time series output such as history forecasts fitted values and confidence limits To open the Item Report view select View gt Item Report or click the yellow View Item Report icon O If you double click an item on the Item Report the Navigator will jump directly to that item Thus you can use the Item Report as the equivalent of a Hot List to navigate through the listed
139. ext fields Helper Files Helper variables are either weighting variables by analogy variables or event schedules They are identified by the use of a preceding or trailing underbar in their name Usually event schedules are created interactively using the Event Manager However if you wish you can create event schedules in Excel or in a database and import them into your project using Project gt Import gt Helpers Weighting variables and by analogy variables must always be created in Excel or in a database and imported into your project using Project gt Import gt Helpers Helper variables are created in an identical fashion to your input data with three exceptions 130 Setting Up Your Data 1 Attribute fields are not required since they are associated with different items using modifiers 2 Their names must begin or end with an underbar so that Forecast Pro Unlimited can recognize them as helper variables 3 Their span should cover both the historic and forecast period Several sample helper files are shipped with Forecast Pro Unlimited including External Helper Variables for 123 Bakery xls and the table Helper Variables in the sample Access database file 23 Bakery ODBC mdb Override Files In addition to entering forecast overrides interactively using the Forecast Overrides view Forecast Pro Unlimited allows you to import overrides from other Forecast Pro Unlimited projects from Excel spreadsheets
140. f this manual Outlier Reports Outlier Reports can be viewed on screen and saved to Excel These reports list the items where outliers have been detected and or corrected 140 Saving Your Work To open an Outlier Report you select View gt Outlier Report or click the yellow View Outlier Report icon A To save an Outlier Report you select Project gt Export gt Outlier Report or use the view s context menu The content and format of the report is controlled using the Outlier Report s context menu Outlier Reports 141 Chapter 3 Working With Scripts and Hierarchies The script is a list of the data files to be forecasted Together the script and the data files define the hierarchy that will appear in the Navigator when you read the data into Forecast Pro Unlimited This chapter explains how to define scripts and also discusses the strategies that Forecast Pro Unlimited uses to produce consistent forecasts for hierarchical data Defining the Script The information contained in the script is recorded in the current forecast project In the case of a new forecast project the script is initially blank If you open an existing forecast project the script is the same as when the project was saved The Define Script dialog box pictured below is accessed by clicking on the red Script icon or by selecting Operations gt Script 143 123 Bakery a 123 Bakery xlsx 4 4 5 Data xls
141. fied maximum number of iterations 1s reached In a multiple level problem the detection is only performed on the end items 1 e the nongroup level If the correction option has been selected after all end items are corrected the group level totals are reaggregated to reflect the corrected values You can adjust the Sensitivity setting to make the outlier threshold more or less sensitive The proper setting will depend on the stability of your data set Set the detection and correction mode to Detection only make sure the other settings match the selections shown above and click OK Reviewing the Outliers In this exercise we will perform the following steps 1 Use the Detection only mode to identify the outliers 2 Use the Outlier Report view and the Graph view to review the detected outliers and determine whether a correction 1s warranted 3 Use the OUTLIER CORRECT modifier to correct the outliers that we feel should be corrected Make sure that the data mode is set to XIs and that the forecast horizon 1s set to 12 Create a script containing the single line 123 Bakery Read in the data and click the red Forecast icon to build the models When the calculations are complete click the yellow View Outlier Report icon A to open the outlier report view and turn off any other open views Reviewing the Outliers 97 BS Forecast Pro Uninied 6 File Settings Operations Project View Window 2007 11 E tough 2012 e Ho
142. for the field Total is Total for all items Since all items have the same value for the first attribute field when we read this spreadsheet into Forecast Pro Unlimited the first level of our forecasting hierarchy will provide a grand total for all items in our spreadsheet Notice that the next attribute field is Category which contains both Muffins and Cakes Thus when we read this spreadsheet into Forecast Pro Unlimited the second level of our forecasting hierarchy will breakdown total sales into Muffins and Cakes The next attribute field is Customer Thus the third level of our forecasting hierarchy will breakdown the Muffins and Cakes into Customers The next field is the Variable Name labeled SKU so the final level of our hierarchy will breakdown the Category by Customer into SKUs The order of appearance on the spreadsheet dictates the structure of the hierarchy so you Il want to take care when constructing your spreadsheet Often this entails sorting your spreadsheet on the attribute fields prior to reading it into Forecast Pro Unlimited If you use a pivot tables in Excel to create your input files the resulting spreadsheet will only include records in the attribute fields when the attributes change Thus the data in our example would be represented as shown below Using Attribute Fields to Define a Hierarchy 129 xd I3 Bakery Compatibility Mode Microsoft Excel nn eci xX Hom I t Page L F Data Review View Add
143. forecasts from very short series are simplistic Although collecting additional data may require some effort it 1s usually worth it If your data are seasonal it is particularly important that you have adequate data length The automatic model selection algorithms in Forecast Pro Unlimited will not consider seasonal models unless you have at least two years worth of data This is because you need at least two samples for each month or quarter to distinguish seasonality from one time irregular patterns Ideally you should use three or more years of data to build a seasonal model Finally remember that forecasts are never perfect Forecast Pro Unlimited bases its forecasts solely on the past history of your data If you know something that Forecast Pro Unlimited did not then you may want to adjust Some Forecasting Tips 15 the forecasts judgmentally For instance you may know of future events like a large upcoming sale or the introduction of a new product You can use the quantitative forecasts as a starting point and apply your own insight and knowledge of future events to improve them 16 A Quick Overview of Forecasting TUTORIAL Lesson 1 The Basics Before you can use Forecast Pro Unlimited effectively you must learn some basic concepts This tutorial will guide you through these fundamentals The tutorial is divided into staged lessons You should complete them all to get a sound introduction to Forecast Pro Unlimited Thi
144. g Total gt Muffins gt Stuff Mart from the Navigator into the Hot List area Your display should now look like the one below Working With a Hot List 33 E Forecast Pro Unlimited 64 bit oo i Ss Se a File Settings Operations Project View Window 0665066406604 00006 Stuff Mart COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 B Grocery Land COR 12 11 BLU 12 11 APP 12 11 amp Food King COR 12 11 BLU 12 11 APP 12 11 Cakes Stuff Mart VA 20 01 ST 20 02 2007 1 gt though 2012 6 gt Hodot 0 gt Total gt Muffins gt Sut Man Total gt Mrs gt Sul Mat gt COR12 11 Tea gt Muffins gt Stuf Mat gt BRA 12 11 gt APP 12 Total gt Muffins gt Stuff Mart gt OAT 12 11 GS Project03 Graph 123 Bakery Inc Stuff Mart Customer 2010 Jan 2012 Jan WB Forecasts MMB Forecast Interval Click on the different items in the Hot List and notice that as you do so the Navigator selection and views are immediately updated to match your selection Right click in the Hot List area to call up the Hot List s context menu Notice that there are a full range of options to control how Hot List items are displayed and to import and export Hot Lists Select Clear to clear the Hot List File Settings Operations Project Window 00000668 086 044 0 0008 Stutf Mart
145. g period of time but frequently changes the SKU s that make up the line A laser printer manufacturer for instance often introduces new models and retires old ones The result may be that the overall product line can be accurately forecasted but the individual item histories are too short to support seasonal models In these instances the top down approach is particularly useful For instance assume that SKU1 and SKU2 have been phased out and replaced by SKU3 and SKU4 We also assume that at the end of the historic data only SKU3 and SKU4 are alive However the histories for SKU3 and SKU4 are too short to generate seasonal forecasts The manufacturer is interested in forecasting the group LINE SKU3 and SKU4 The approach below takes care of the problem LINE INDEXES SKUI SKU2 SKU3 SKU4 This causes Forecast Pro Unlimited to follow the following procedure Forecast LINE obtaining seasonal indexes Use the LINE seasonal indexes to deseasonalize the SKU s Forecast the resulting nonseasonal SKU level data These nonseasonal models require very little data Use the LINE seasonal indexes to reseasonalize the SKU level forecasts 78 Building Multiple Level Models By default the LINE forecasts are then replaced by the summed SKU level forecasts If you do not want this to happen you can add the keyword YTOPDOWN to the group LINE The script presented in this example can also be used when the SKU level histories are long lived Th
146. hases in August and they may be overstocked in October You can assign the pre and post promotional effects as event types of their own These events will of course be associated with decreases in sales Example 2 Sometimes one SKU of a brand or product line is promoted but closely related SKU s are not The result may be that the promoted SKU cannibalizes the sales of the other SKUs You can treat this effect by assigning cannibalization events for these SKUs But be cautious Overuse of this technique will result in an overly complex model and possible deterioration of forecast performance This concludes Lesson 6 More Adjustments for Promotions 71 Lesson Building Multiple Level Models In this lesson you will learn how to define group variables and prepare multiple level forecasts Bottom up and Top down Forecasting Start the program click the red Script icon and select Presto Camera Company Accept the script read in the data forecast the data open the graph view and fully expand the Navigator Your screen should now look like the one shown below 73 ES Forecast Pro Unlimited 64 bit Project08 zx q ali File Settings Operations Project View Window Hel 066056664086 0 40 00106 Total 2008 gt 1 through 2012 gt 2 Holdout 0 vCamera Total Total ASA100_Color HB Forecasts MMM Forecast Interval 5 Project08 Forecast Report o amp ss Forecast Report for
147. he Basic tab shown above The Formats tab is used to set details of the data file interface and control the precision in the on screen displays The data file interface defaults have been carefully chosen and should only need to be changed for users using comma delimited data files or who do not follow the US conventions for the decimal separator The Outliers tab allows you to control the settings for outlier detection and correction This will be covered in Lesson 10 The Overrides tab allows you to customize the override facility The Command Line tab allows you to control the settings for command line operation This will be covered in Lesson 12 The Pareto Analysis allows you to dictate how to calculate the ABC classifications This will be covered in Lesson 5 The Advanced Controls tab is used to set details of the optimization routines and to control how often Forecast Pro Unlimited checks for product updates Let s take a closer look at the Basic tab Forecast Pro Unlimited reads in the historical data from the Input Data directory Project files are saved to the Projects directory Forecast files and reports are written to the Output directory The Data mode specifies the format of the historical data The forecast output can be saved in any supported format You can set the percentiles for the confidence limits the lead time for safety stock calculations the length of the forecasts forecast horizon and can tell Forecast Pro Unlimited
148. he cumulative MAD for Exponential smoothing was 150 and for Box Jenkins was 241 The rolling out of sample test used a maximum horizon of 6 and generated 21 forecasts for each method If you do not instruct Forecast Pro Unlimited to use a specific forecasting technique it will use expert selection to select the appropriate technique for each item forecasted If you examine Total gt USA gt PG1 204 2 s forecast report you Il notice that it includes an Expert Analysis section and that expert selection chose to forecast this item using a nontrended seasonal exponential smoothing model Let s say that we wish to dictate that a Winters exponential smoothing model be used for this item Winters is a form of exponential smoothing which includes both a trend and seasonal component To specify the model right click on Total gt USA gt PG1 204 2 to bring up the Navigator s context menu and then select Model gt Exponential Smoothing gt Winters 40 Using Forecast Modifiers A 3 S ES Forecast Pro Unlimited 64 bit Project04 f File Settings Operations Project View Window 00o 5000 PG1 204 2 OOE PG1 204 1 PG1 204 2 Cases GFCI Ivory PG1 204 5 Project04 Forecast Report Model Details Ready Notice that WINTERS now appears next to Total gt USA gt PG1 204 2 on the Navigator WINTERS is a forecast modifier In this instance it is used to indicate that you have opt
149. ial section of this manual Collaborating With Colleagues for a discussion of the pros and cons of super projects and an illustration of using the Project Manager to create a super project and 2 read the Working With Super Projects chapter of the Reference section of this manual carefully Business Forecast Systems and Forecast Pro distributors also offer consulting services to help you establish your forecasting process Wy Manage Project a impart When creating a new super project you first use the Add button to select the component projects to consolidate The Import options allow you to specify what you wish to import from the component projects When first creating a super project you will generally import everything When updating a super project you may want to pick and choose what to import The Erase first options for modifiers and overrides are only relevant if you are updating a super project If selected they will erase any existing modifiers and overrides prior to loading in the modifiers and overrides from the component projects After you have selected the component projects and the import selections the Apply button is used to create or update the super project Menu Items and Dialog Boxes 195 The View Menu The View menu allows you to view reports display graphs and customize your display View gt All available views The first seven options on the View menu will toggle the selected view window on and off
150. ights gt Select WG7 _X Use an weighting transformation _X is the name of the time series containing the weights The procedure divides each value of the specified time series by the corresponding value weight in _X It then forecasts the deweighted variable and multiplies the forecasts by their corresponding weights The weighting variable _X must span the entire history and forecast period for each variable to be forecasted Outlier Detection Correction Modifiers When you generate forecasts Forecast Pro Unlimited uses the current settings in the Outliers tab to determine the default behavior for detection and correction or outliers There are three choices None Do not detect nor correct for outliers Detection only Detect and report outliers but do not correct for them 1 e base the forecasts on the uncorrected values 156 Using Forecast Modifiers Detection and correction Detect and correct outliers 1 e base the forecasts on the corrected values You can override this project level setting for individual items using the forecast modifiers listed below Forecast Pro Unlimited only detects outliers for end items 1 e non group level data so the modifiers cannot be used for groups Outliers gt Default no modifier Revert back to the default project level setting for the specified item This option is used to remove any of the outlier modifiers listed below from the Navigator Outliers gt Off OUTLIER OFF
151. iliation approaches These modifiers can only be used on group level data TOPDOWN directs Forecast Pro Unlimited to perform top down reconciliation for all members of the indicated group This procedure begins by preparing forecasts for each and every group and item Then it proportionally adjusts the nested lower level items and groups forecasts to sum to the TOPDOWN group forecast If the YTOPDOWN group is itself nested within larger groups the forecasts for the larger groups are computed by the bottom up approach An example of top down reconciliation is given below You cannot define a TOPDOWN group as a member of another TOPDOWN group Reconciling the Hierarchy 145 INDEXES directs Forecast Pro Unlimited to calculate the seasonal indexes at the indicated group level and use them to deseasonalize the histories for the nested items and groups The deseasonalized series are then forecasted and as a final step reseasonalized This approach works well when the items share the same seasonality It allows one to deal with items whose histories are too short to extract seasonality directly You cannot nest INDEXES groups within each other Model parameters are reestimated for each item of the INDEXES group The following screenshot illustrates the use of the YTOPDOWN modifier 0065566406604 00006 Retail 2005 1 gt through 2011 gt 34 gt Holdou 0 Brand 3 Retail TOPDOWN Retail Itemid1 CANSI2
152. important features of the data Very short or very noisy historic records usually yield very simple models because the data are too short to support statistical estimates of important features like seasonality If the data are very short say four points or fewer Forecast Pro Unlimited can pick up neither seasonality nor trend and reverts to the Simple Moving Average model For more than four points but less than two years worth of data Forecast Pro Unlimited can fit and forecast trends but not seasonality If your data are in fact nonseasonal your forecasts are likely to be adequate If your data are in fact seasonal the forecasts are likely to be poor Forecast Pro Unlimited cannot extract or forecast the seasonality and part of the seasonality may be mistaken for trending However seasonal forecasts from short data sets are feasible when the short data sets are nested within aggregate product groups with longer histories The seasonality of the aggregate can be borrowed and applied to the short data sets See the section entitled Multiple level Scripts in the next chapter for details Seasonality can be estimated and forecasted from two to three years of data but this amount of data is marginal especially when your data are noisy or intermittent In some cases patterns in the noise are mistaken for seasonality yielding inappropriate seasonal forecasts Robust capture of seasonality requires three or more years of dat
153. in the fit and forecast If you look closely at the graph you might notice that the historic value for December 2012 is the second largest in the data set SKU087 was the free gift for part of this month Click December 2012 on the graph and use the dropdown to assign the period to the Partial free gift month event code Click the Commit button to update the model Examine the model output and experiment with the event manager until you are comfortable with its operation When you are finished exit the program This was a very simple example where we only had two promoted periods during the history Because the periods were promoted differently one was a partially promoted month and the other was a fully promoted month we used two event codes to capture the responses In our next example we will build an event model for data with a recurring promotion as well as a recurring competitive promotion Modeling a Recurring Promotion Start Forecast Pro Unlimited select File gt Open and open the project Tutorial 6 mouthwash This project contains monthly sales of a nationally advertised brand of mouthwash SS Forecast Pro Unlimited 64 bit Tutorial 6 mouthwash Lo jes File Settings Operations Project Vi 00605666064 00186 MintyFresh24 1 gt through 2013 Hokdout 0 gt Total ES Tutorial 6 mouthwash Graph gt MintyFresh32 MintyFresh24 24 ounce bottle of MintyFresh Mouthwash _Helpers gt _promos
154. indexes to include in the model To illustrate let s model C 6 using the _P amp H event variable Modeling Weekly Data 69 Use the Schedule dropdown box to select _P amp H Notice that _P amp H maps each week into one of 13 periods i e weeks 1 4 are assigned to Period 1 weeks 5 8 are assigned to Period 2 etc The summer holiday weeks Memorial Day 4 of July and Labor Day have their own unique event Codes 14 15 and 16 respectively Click the Commit button to build the model The resulting model uses 16 event indexes 13 to capture the seasonality and three for the summer holidays SS Forecast Pro Unlimited 64 bit Tutorial 6 beer M E N File Settings Operations Project View Window Hel 06066 664 086 04 00006 1 through 2013 Cans C 6 EVENT _P amp H C 6 6 Packs 12 Ounce Cans Helpers _Holidays gt P amp H gt _Periods E A E E A E E E EAEE S E EESE E E E E A OEE E Ready Notice that the forecasts exhibit much smoother seasonality than our previous model That is because there are now more samples of each index to be estimated Adjustment for Outliers Historic data sets often exhibit the effects of one time events that cause outliers The event that causes the outlier may be known or unknown Although exponential smoothing is a remarkably robust procedure these outliers may decrease the quality of the forecasts and especially the confidence li
155. ing Evaluation for Items in Group section of the Forecast Report view 104 Out of sample Testing Li Forecast Pro Unimited Project 9 E lt nj Sm File Settings Operations Project View Window Hel 009055664066 0440 00886 1 through 111 gt 12 gt Holdout 6 5 Reset MAK044 SMA 3 MAK045 SMA 3 MAK046 SMA 3 MAKO47 SMA 3 t MAK048 SMA 3 A Out of Sample Rolling Evaluation for Items in Group MAK049 SMA 3 MAKOSO SMA 3 MAKOS1 SMA 3 Hor N MAPEN MAD MAK052 SMA 3 1 408 408 1 910 14 MAKOS3 SMA 3 213401340 2091 25 MAKISENSMA 3 342721272 1 961 82 di 412041204 1 970 14 MAKOS6 SMA 3 f MAKOS7 SMA 3 ise aces MAKOS8 SMA 3 6168 68 2 388 80 MAK059 SMA 3 MAK060 SMA 3 Out of Sample Static Evaluation MAKO61 SMA 3 MAK062 SMA 3 le Forecast AD MAK063 SMA 3 MAK064 SMA 3 MAKO65 SMA 3 MAK066 SMA 3 Minimum 930 012 Maximum 930 012 930 011 89 932 487 91 2 446 02 930 011 89 852 988 42 77 023 47 39 734 75 930 011 89 876 756 39 53 255 50 44 241 67 MAK067 SMA 3 930 011 89 868 045 62 61 963 27 48 672 07 930 011 89 803 670 82 126 341 07 64 205 87 930 011 89 883 766 35 46 245 54 61 212 48 There are no overrides for this item There are several ways to compare the results of this forecast and our expert selection forecast The most common approach is to look at the MAPEs Mean Absolute Percent Error for the two In our example the MAPESs for expert selection are
156. ing models found on the Model context menu Forecast Pro Unlimited supports a broad range of custom modeling modifiers These modifiers accommodate a wide range of modeling options including confidence limits percentiles safety stock lead times and power transformations Custom modifiers are entered using the Custom Modifier option on the Navigator s context menu Consult the Using Forecast Modifiers section to see a full list of the available modifiers The modifiers are also documented in the help system Experiment with the various modeling options until you are comfortable with their operation When you are finished exit the program This concludes Lesson 2 42 Using Forecast Modifiers Lesson 3 Updating a Forecast Project For most organizations updating the forecast is a routine operation that occurs every planning period For instance if the forecasts are prepared using monthly data then each month the data are updated to include the latest observation and the forecasts are regenerated Forecast projects enable you to quickly update last period s forecast and give you the option of loading or not loading your previously specified forecasting models Hot List and forecast overrides In this lesson we will explore how this is accomplished Defining the Forecasting Process An important key to implementing a successful forecasting process using Forecast Pro Unlimited is to define the process upfront and make sure that
157. integer Periods per seasonal cycle Must be an integer See the Overview section at the beginning of this chapter for more details on these items The remaining fields contain historic data Each time series is terminated with a semicolon and the file 1s terminated with two semicolons The one time series per line format illustrated above is easy to read however keep in mind you can use any combination of rows and columns Formatting rules Keep the following points in mind when you are creating your MLT files The record headers variable name field and variable description field must always appear in quotes If you are not using attribute fields each variable name must be unique If you are using attribute fields each variable name within a given group must be unique If you plan to use commas to separate items or as place holders for large numbers you will need to set a few options on the format tab of the Settings Options dialog box to insure that they are interpreted correctly 124 Setting Up Your Data Be careful not to use dollar signs page breaks or other symbols that may confuse Forecast Pro Unlimited Use the word MISSING instead of a number to indicate a missing value If you use zeroes to pad the data prior to an item s availability make sure that Ignore leading zeros is selected on the Formats tab of the Settings Options dialog box Using ODBC ODBC provides direct data communications between Forecast P
158. ith an underbar _ including those that have nothing to do with Forecast Pro Unlimited A table from the database is treated just like a file when you are using one of the file data modes Thus you should arrange data into the tables or views that make logical sense as entries in the script Formatting rules ODBC drivers vary a great deal If you experience any difficulties connecting to the database the first thing to check is that you are using the latest ODBC driver available for your database With the exception of the last one which only pertains to Oracle all of the notes below have been verified using Microsoft Access There is a chance that your ODBC driver might be more or less restrictive Missing values are indicated by whatever rules are used by the native database Every database recognizes the distinction between zeroes and missing values If you want you can encode leading and trailing missing values as zeroes In that case you must make sure that Ignore leading zeros and or Ignore trailing zeroes is selected on the Format tab of the Settings Options dialog box Using ODBC 127 Table names and variable names should begin with a letter and should not include blank spaces If you are not using attribute fields each variable name must be unique If you are using attribute fields each variable name within a given group must be unique Oracle Users Some Oracle drivers will only work if the Hist_Value fi
159. ject View Window Help 00090000 4 0GS 04H DOO BS 1 through 2012 H 6 3 Total Muffins 2 COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 Sids Club COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 Grocery Land COR 12 11 BLU 12 11 APP 12 11 Food King COR 12 11 BLU 12 11 APP 12 11 G Cakes 3 Stuff Mart VA 20 01 ST 20 02 m Total gt Cakes gt Food King Stuff Mart Customer Tutorial 1 Numeric Output Muffins Muffins Muffins Muffins Muffins Stuff Mart Stuff Mart Stuff Mart Stuff Mart Stuff Mart Sids Club Sids Club Sids Ciub Sids Club Grocery Land Grocery Land Grocery Land Food King Food King Food King Stuff Mart Stuff Mart Stuff Mart Stuff Mart Stuff Mart Stuff Mart Stuff Mart Stuff Mart Sids Club Sids Cuub Sids Club Sids Club Sids Club Muffins Muffins Muffins Muffins Muffins Muffins Muffins Cakes Cakes Cakes Cakes Cakes Cakes Cakes Cakes Cakes Cakes Holdout 0 COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 COR 12 11 BLU 12 11 APP 12 11 COR 12 11 BLU 12 11 APP 12 11 VA 20 01 ST 20 02 LF 20 02 LE 20 02 CO 20 01 CH 20 01 CA 20 01 BU 20 02 VA 20 01 LF 20 02 12 count Corn Muffins 12 count Bran Muffins 12 count Blueberry Muffins 12 count Appie Muffins 12 count Oatmeal Muffins 12 count Corn Muffins
160. l at the top of the box is used to assign event codes to the current schedule You select points on the graph by clicking on them and then use the dropdown to associate the selection with a specific event Holding down the lt Ctrl gt key when selecting points on the graph allows you to select multiple points The display grid in the middle of the dialog box shows the event code definitions on the current schedule along with their status Pending status indicates that the changes are not yet reflected in the current forecast model Clicking the Commit button will accept the current changes and build the specified event model The Show all periods option will include all periods in the display grid regardless of whether or not events have been defined Manage Events eres Edit The Schedule dropdown is used for several purposes When the dropdown is closed it displays the name of the event schedule associated with the current item Opening the dropdown displays the currently available event schedules and allows you to select one It also provides options to disassociate the currently selected schedule from the currently displayed item New rename the current schedule Save as import events from other schedules into the current schedule and to delete the current schedule from the Forecast Pro Unlimited database 180 Command Reference gt Clicking the Edit button invokes the Manage Event Codes dialog
161. l selection at the aggregate level It is not necessary that item histories begin and end at the same time Thus items may consist of SKU s that have been retired or replaced by new SKU s Obsolete SKU s will contribute to the group level history but will not themselves be forecasted You will notice that the starting and ending dates for the overall script consist of the starting date for the oldest item and the ending date for the newest Forecasts will be prepared for all items and groups that are alive at the end of the data set Those whose histories terminate before that time are considered dead they contribute to the historic 144 Working With Scripts and Hierarchies aggregates and therefore influence aggregate forecasts but they are not themselves forecasted How to organize your data into hierarchies was discussed in the Setting Up Your Data chapter Reconciling the Hierarchy If no group level reconciliation modifiers have been specified a bottom up approach will be used to reconcile the forecasts The procedure operates as follows First Forecast Pro Unlimited prepares forecasts for each and every group and item Then it recomputes the group level forecasts by aggregating the constituent forecast bottom up The original group level forecasts are replaced but the width of their confidence limits are retained and re centered on the new forecasts Two group level modifiers can be used to specify alternative reconc
162. l is selected and that the adjusted R square is 0 50 SS Forecast Pro Unlimited 64 bit Pe A a Se File Settings Operations Project View Window 000a 566 4 OGG 0 0008S a tough 2012 110 Hodo o Product 1 Sales in thousands 2009 J 2010 Jan 2011 Jan 2012 Jan 2013 Jan HM Fitted Values WH Forecasts MMB Forecast Interval Right click on Product 1 to call up the Navigator s context menu Select Weights and then select _Weeks File Settings Operations Project View Window b550 0085 08808 00008 a E tough 2012 110 Hodo o Product 1 Sales in thousands 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan BB History HM Fitted Values WH Forecasts HM Forecast Interval Product 1 Sales in thousands Adjusting for 4 vs 5 Week Periods 91 The second model s superior fit and narrower confidence limits are easily discernible from a visual inspection of the graph Notice that a seasonal model is selected and that the adjusted R square is now 0 82 Right click on Product to call up the Navigator s context menu Select Apply Modifier s To gt All Items Since the other four products all use the same calendar applying the weighting transformation improves the model in all cases Other Uses for Weighting Transformations The weighting transformation is useful in a wide variety of situations This section briefly notes some of them Its purpose is to indicate some directions
163. larly useful when you are integrating forecasting with other software systems and need a hands off approach To drive Forecast Pro Unlimited entirely automatically follow these two Steps 1 Prepare a valid project and place it in your project directory The easiest way to prepare this file is to use Forecast Pro Unlimited interactively to define all desired project settings output formats a script and optionally forecast modifiers and overrides and then save the project using use File gt Save Alternatively you can generate the file externally but this will require understanding the project file and the optional corresponding MDB file formats 2 Drive Forecast Pro Unlimited by issuing the command C Program Files Forecast Pro Unlimited v8 ForecastProUnlimited exe Test FPZip b Command line Operation 201 where we assume that the program is located in the directory C Program Files Forecast Pro Unlimited v8 and a project named Test FPZip is located in your current project directory The b parameter is used to indicate that you wish to run in command line batch mode You can issue the command in any number of ways including Select Run from the Start menu and issue the command from there Set up a shortcut to issue the command Issue the command from within a different application using a system call The Command Line tab of the Settings gt Options dialog box allows you to specify several key c
164. le 1s copied into the program directory You can access the file directly or via the Help menu in Forecast Pro Unlimited Chapter l is a detailed statistical reference It explains the theory behind Forecast Pro Unlimited s statistical models diagnostics and methodology Chapter 2 is a discussion of some of the general considerations that apply to automatic batch forecasting Checking Your Forecast Pro Unlimited Package Your Forecast Pro Unlimited package should contain the following items This User s Manual This book walks you through the installation and use of Forecast Pro Unlimited One installation CD A warranty registration card A maintenance and support contract If your package is missing any of the above items please contact Business Forecast Systems Inc 6 Before You Begin What You Need to Run Forecast Pro Unlimited A computer running a Windows operating system A minimum of 512 MB of random access memory RAM Additional memory will greatly enhance program performance We recommend 2 Gigs if you are running a 32 bit operating system and as much RAM as your budget can afford if you are running a 64 bit operating system A hard disk drive with 30 MB of free space Registering Your Forecast Pro Unlimited Package Please take a moment NOW to fill out and mail the Registration Card you received with Forecast Pro Unlimited or visit www forecastpro com and register on line Registering your software entitles
165. le risky Zeroes in the middle of your data are always treated as numerical values Therefore embedded missing values must be explicitly coded as missing Since the way you do this depends upon the data format it will be addressed as we discuss each specific data format Forecast Pro Unlimited interprets your input data and missing values as the data are read Thus you cannot change treatment of missing data for a data set that has already been read except by rereading it from scratch The interpretation of zeros and missing values depends upon the Ignore leading zeroes and Ignore trailing zeroes flags and upon the Missing values setting on the Formats tab of the Settings gt Options dialog box There are three possible settings for missing values Truncate Impute or Zero Overview 115 Truncate directs Forecast Pro Unlimited to use only the most recent unbroken stream of data All data up to and including the last missing value are discarded Impute directs Forecast Pro Unlimited to discard leading and trailing missing values but to impute embedded missing values via linear interpolation Zero directs Forecast Pro Unlimited to reset missing values to zeroes and to treat them as numerical values This setting is appropriate when the data file is written from a database in which only the non zero records are stored In other cases it might lead to badly biased forecasts Header information You will need to collect not
166. lect this option so that your output file will match your input file Consult the Setting Up Your Data chapter for a discussion of attribute fields Include record type Include a record type field that identifies which forecast component is being output This is useful if you use the Break record up into lines option and are outputting more than one numeric output component Item Name Include a field listing the name of the variable as it appears on the Navigator If the Include ancestry option 1s active the ancestry will be shown as part of the item name The variable names used for all numeric output components other than Forecasts will include a suffix indicating the record type Description First historic date and First forecast date Include fields for the selected options The Numeric Output section of the tab allows you to select the Numeric Output components you would like to include 178 Command Reference Numeric Output Design Output Format Time Series Data Model and Statistics Sample size Std forecast emor Number of parameters BIC Standard deviation y SMAPE R square RMS Eror Safety Stock Basis Durbin Watson MAD Mean Ratio 2 DD The Model and Statistics tab is used to define the within sample statistics and model details that you wish to include and to set their precision If you are outputting a fixed width text file then you may also set the column widths Most of the options are self
167. lete select the group Monthly on the Navigator and view the Out of Sample Rolling Evaluation for Items in Group section of the Forecast Report view File Settings Operations Project View Window Help GOOG 565 AA 04 6 OO 4G 1 3 through 111 312 gt Holdout 6 gt Reset MAK044 Minimum 778 575 MAKO45 Mm 971 090 MAKO46 roe MAK047 a MAK048 7 Out of Sample Rolling Evaluation for Items in Group MAK049 MAKOSO MAKOS1 Hor N MAPEN MAD MAK052 1 408 408 762 07 MAK0S3 213401340 839 59 MAKSI 312721272 1 065 74 DnD 412041204 1 201 05 MAKOS6 o MAUS 51136113 1 164 31 MAKOSS 6 68 68 1 499 67 MAK059 MAK060 Out of Sample Static Evaluation MAKO61 MAK062 e Forecast AD MAD MAK063 920 895 56 932 457 91 11 562 35 11 562 35 ORION 870 151 55 852 988 42 17 163 13 14 362 74 piine 826 847 72 876 756 39 49 908 66 26 211 38 MAK066 S MADD 844 151 74 868 048 62 23 896 88 25 632 76 778 574 58 803 670 82 25 096 24 25 525 45 828 235 95 883 768 35 55 530 40 30 526 28 There are no overrides for this item The tables display the following information Means are always taken over all the variables forecasted for a particular script line Hor 1s the forecast horizon N is the number of cases used to compute all statistics for this horizon other than the MAPE see below MAPE N is the number of cases used to compute the MAPEs for this horizon This can be less than the total number
168. lower than working on a project stored locally To improve performance in these cases Forecast Pro Unlimited supports zipped projects When you save a zipped project Forecast Pro Unlimited zips the four standard project files described in a previous section of this manual into a single file with the extension FPZip When you open a zipped project Forecast Pro Unlimited copies the zipped file from the network drive to a local workspace unzips the project files and opens the project allowing you to work on your project locally even though it was saved to a network drive When you resave your zipped project 212 Appendixes Forecast Pro Unlimited will zip the updated local project files and save the updated FPZip file to the network drive To save and open zipped projects you select FPZip as the file type in the File gt Save as and File gt Open dialog boxes 5 Use the Manual Override Mode If you make overrides to large complex hierarchies the reconciliation can take a little time To minimize the reconciliation time Forecast Pro Unlimited supports a manual override mode When this mode is active the override window will include a Retain button as well as a Commit Button The Retain button is used to accept overrides without reconciling the hierarchy In this mode you would typically enter and retain all of the overrides you wish to make 1 e for multiple items and then click Commit to perform the reconciliation The control
169. lper variables weighting variables and or event schedules into the current project from an Excel file or an ODBC table or query The format of the Excel file is described in the Setting Up Your Data chapter Project gt Export The Project gt Export menu allows you to save Numeric Output files and all Forecast Pro Unlimited report files Consult the appropriate section of the Forecast Pro Unlimited Interface chapter for details on designing the content and format of these output files Project gt Set password Project gt Set password is used to password protect your project When you attempt to open a password protected project Forecast Pro Unlimited will prompt you for the password and only open the project if the correct password is entered 194 Command Reference When you password protect a project Forecast Pro Unlimited uses Microsoft Access s security functionality to password protect the project s mdb file This means that in addition to requiring the password to open the project in Forecast Pro Unlimited the password is also required to open the project s mdb file in Microsoft Access Project gt Manage Project gt Manage invokes the Project Manager The Project Manager is used to consolidate multiple projects into a super project or to update a super project Setting up and maintaining a super project is reasonably complex If you are planning on using super projects you should 1 refer to Lesson 4 of the Tutor
170. ltiplicative seasonal A additive seasonal Forecast Pro decides and event type Z M multiplicative A additive Forecast Pro decides This modifier can only be used in conjunction with EVENT Model gt Exponential Smoothing gt Custom XYZ A B C D E Use an exponential smoothing model with trend type X N no trend L linear trend D damped trend E exponential Forecast Pro decides seasonality type Y N nonseasonal M multiplicative seasonal A additive seasonal Forecast Pro decides event type Z M multiplicative A additive Forecast Pro decides and user defined smoothing weights A level B trend C damping growth D seasonal E event This modifier can only be used in conjunction with EVENT Event Model Modifiers 155 The Weighting Transformation Modifier The weighting transformation is most commonly used to deseasonalize your variables using externally supplied seasonal weights or to normalize the data for trading day effects e g 4 4 5 calendars number of working days per month etc To use the weighting transformation you must create a helper variable containing the weights Helper variables names must start or end with an underbar Helper variables are not forecasted and their values are not included in group totals Helper variables are used in conjunction with event models by analogy models and weighting transformations The following modifier is used to specify the weighting transformation We
171. metimes change weeks and when this occurs the fit can be poor For instance the 4 of J uly fell in week 27 before 2010 but fell in week 28 in 2010 and thereafter The fitted value for week 27 in 2010 exhibits a strong peak and misses the actual holiday peak that fell in week 28 Forecast Pro Unlimited used a standard Winters model to forecast C 6 This model uses 52 seasonal indexes for the data and does not accommodate the holidays changing weeks from year to year Right click on the graph window to call up the context menu and select Manage Events to open the event manager Use the Schedule dropdown to select the _Holidays schedule _Holidays assigns event codes to each of the summer holidays The event code 14 is assigned to each week containing Memorial Day the event code 15 for the week containing the 4th of July and the event code 16 for the week containing Labor Day Including an event index for each holiday allows us to model the holidays that move around the calendar If we were to model this data as a monthly series the holidays would not change periods and an event model would not be necessary Click the Commit button to build the model 68 Building Event Models EJ Forecast Pro Unlimited 64 bit Tutorial 6 beer 05655 982 086 04 920006 2007 Manage Events C 6 6 Packs 12 Ounce Cans _Holidays i IDA 800 Bae See aaa H SD Aa a Ea te ee t
172. mits 70 Building Event Models You can eliminate the effect of an outlier by coding it as a special event that occurs only once If you have several outliers each must be coded as a distinct event type Forecast Pro Unlimited will explain each outlier as the result of its associated event The impact of outliers on the forecasts and the confidence limits will be greatly reduced Beware however if outliers continue to occur in the forecast period then the confidence limits are likely to be unrealistically narrow More Adjustments for Promotions The event adjustment model provides a very flexible framework to treat promotional effects of many kinds This section briefly notes some of them Its purpose is to indicate some directions you may want to take with your own business data The examples that are given require assigning additional event types in your event variable Each new event type provides additional ability for Forecast Pro Unlimited to explain your historic data by making the event variable more complex Keep in mind that if your event description is overly complex the out of sample performance of your model may deteriorate You must strike the right trade off between goodness of fit to your historic data and model complexity To do this will require experimentation and monitoring of actual model performance Example I A promotion in say September may have effects in August and October as well Buyers may delay purc
173. models and weighting transformations If the product has not yet launched 1 e there is no historic data available then you must also supply an estimate of the initial sales over a specific period of time the launch total over the launch horizon Forecast Pro Unlimited will then create the forecast by proportionally allocating the launch total over the launch horizon using the analog series to define the proportions If any historic demand for the new product is available you may either supply the launch total and launch horizon or allow Forecast Pro Unlimited to calculate the forecasts by fitting the existing data to the analog series In this exercise we will look at two examples one where no data are available for the new product and the other where the initial 3 months of sales are known Start the program select File gt Open and open the project Tutorial 8 by analogy Right click Product 0 on the Navigator to invoke the context menu and then select Model gt By Analogy Forecasting by Analogy Model Settings We must begin by selecting the analog variable to use In our example there are two available Select _Profile 1 by clicking it Since Product 0O does not contain any historic demand a launch total must be specified The default value for the Specified launch total is to calculate it using the values specified in the analog variable in our example this yields 279 587 Let s say that our market
174. n This allows you to specify multiple forecast modifiers without having to wait for the program to recalculate the forecasts in between each specification Display dates generically If this option is selected then monthly labels will be displayed using period numbers rather than the names of the months For example 2007 01 will be used rather than 2007 Jan This option is often used when working with a fiscal calendar where displaying the names of the months could be confusing Use SQLite If this option is selected Forecast Pro Unlimited will save the project s database file as a SQLite file with the extension db If you are running the 64 bit version of Forecast Pro Unlimited this option will always be selected and greyed out on the dialog box 1 e you can t change it If you are running the 32 bit version of Forecast Pro Unlimited and this option is not selected Forecast Pro Unlimited will save the project s database file as a Microsoft Access file with the extension mdb The setting can only be changed on a new project prior to reading in the data You can change the default for new projects by setting this option and then selecting the Default Menu Items and Dialog Boxes 191 button If you are using the 32 bit version of Forecast Pro Unlimited you can also convert existing projects that use Microsoft Access to ones that will use SQLite using the menu option Operations gt Convert to SQLite Enable event manager
175. nc BES for the BFS software that accompanies this EULA 1 DEFINITIONS A BFS means Business Forecast Systems Inc 68 Leonard Street Belmont MA 02478 USA the author and owner of the copyright of this computer program product B Computer means the single computer workstation terminal or other digital electronic device on which You use this program C Software means the set of computer software programs in this package regardless of the form in which You subsequently use it D Licensee means an individual or single entity exercising rights under and complying with all the terms of this EULA In the remainder of this EULA the Licensee is referred to as You E Authorized User means the Licensee in the case where the Licensee is an individual In the case where the Licensee is an entity Authorized User means 1 an employee of the Licensee but only while such employee is acting within the scope of such employee s employment by Licensee and 11 the primary user of the Computer on which the Software is installed If You do not agree with the terms of this EULA BFS does not grant any license to the Software and You should not download install or use the Software In such event that You do not agree with the terms of this EULA and have already installed or downloaded the Software You must remove the Software from your Computer and return to BFS the complete software package in
176. nded nonseasonal models perhaps by forcing a Simple exponential smoothing model This concludes Lesson 9 Other Uses for Weighting Transformations 93 Lesson 10 Detecting and Correcting Outliers An outlier is a data point that falls outside of the expected range of the data 1 e it is an unusually large or small data point If you are forecasting a time series that contains an outlier there is a danger that the outlier could have a significant impact on the forecast One solution to this problem is to screen the historical data for outliers and replace them with more typical values prior to generating the forecasts This process is referred to as outlier detection and correction Correcting for a severe outlier or building an event model for the time series if the cause of the outlier 1s known will often improve the forecast However if the outlier is not truly severe correcting for it may do more harm than good When you correct an outlier you are rewriting the history to be smoother than it actually was and this will change the forecasts and narrow the confidence limits This will result in poor forecasts and unrealistic confidence limits when the correction was not necessary It is the authors opinion that outlier correction should be performed sparingly and that detected outliers should be individually reviewed by the forecaster to determine whether a correction is appropriate 95 Forecast Pro Unlimited incorporates
177. ng model Model gt Exponential Smoothing gt Simple S MPLE Use the simple exponential smoothing model Model gt Exponential Smoothing gt Holt HOLT Use the Holt exponential smoothing model Model gt Exponential Smoothing gt Winters WINTERS Use the Winters exponential smoothing model Exponential Smoothing Model Setti e Cancel Hep Model gt Exponential Smoothing gt Custom EXSM XY Use a custom exponential smoothing model with trend type X N no trend L linear trend D damped trend E exponential Forecast Pro decides seasonality type Y N nonseasonal M multiplicative seasonal A additive seasonal Forecast Pro decides and optimized smoothing weights 150 Using Forecast Modifiers Model gt Exponential Smoothing gt Custom XY A B C D Use a custom exponential smoothing model with trend type X N no trend L linear trend D damped trend E exponential Forecast Pro decides seasonality type Y N nonseasonal M multiplicative seasonal A additive seasonal Forecast Pro decides and user defined smoothing weights A level B trend C damping growth D seasonal Model gt Exponential Smoothing gt Custom SS Use Forecast Pro s automatic identification procedure to determine whether to use seasonal simplification and the appropriate bucket size Model gt Exponential Smoothing gt Custom SS n Use seasonal simplification with bucket size equals n Box Jenkins Model gt Box Jenkins gt Auto
178. ns dialog box as well as formatting for reports and output files Because the settings control how data is read into Forecast Pro Unlimited you may only import project settings prior to reading in the data Menu Items and Dialog Boxes 193 Project gt Import gt Hot List From is used to import a Hot List from a saved project or from an Excel file into the current project Excel Hot List files are created using Project gt Export gt Hot List or using the Export to option on the Hot List s context menu If a Hot List currently exists you will have the option of deleting it prior to importing the new Hot List Project gt Import gt Modifiers From is used to import forecast modifiers from a saved project or from an Excel file into the current project The format of the Excel file is described in the Setting Up Your Data chapter In order for a modifier to be imported the item name and ancestry must match an item in the current project Project gt Import gt Overrides From and Project gt Import gt Overrides From ODBC are used to import overrides and their associated comments from a saved project an Excel file or an ODBC table or query into the current project The format of the Excel file is described in the Setting Up Your Data chapter In order for a value to be imported the item name ancestry and date all need to match an item in the current project Project gt Import gt Helpers From and Project gt Import gt Helpers From ODBC are used to import he
179. nterested in the point forecast since it is the mean value of the distribution The point forecast gives you the minimum expected forecast error 12 A Quick Overview of Forecasting On the other hand suppose you wanted to know how many widgets to produce If you overproduce warehousing costs will be excessive But if you underproduce you will probably lose sales Since the cost of lost sales is usually greater than the cost of overstocking you will be most interested in the upper confidence limit The upper confidence limit tells you how many widgets to produce to limit the chance of stocking out to less than 5 Forecasting Methodologies A wide variety of statistical forecasting techniques are available ranging from very simple to very sophisticated All of them try to capture the statistical distribution that we have just discussed Forecast Pro Unlimited offers the five methodologies that are most appropriate for automated business forecasting simple moving averages discrete data models Poisson or negative binomial Croston s intermittent data model exponential smoothing and Box Jenkins All of these models are univariate techniques They forecast the future entirely from statistical patterns in the past Thus you must have historic records preferably for several years of the variable you want to forecast Forecast accuracy depends upon the degree to which statistical data patterns exist and their constancy over tim
180. ntrols ax Gee Sie The Overrides tab controls operation and display of the Override view Adjustment mode If this selection is set to Override any overrides entered will replace the corresponding statistical forecasts or overrides entered on a preceding row If this switch is set to Incremental overrides you enter will be added as incremental adjustments to the statistical forecast rather than replacing it Thus the final forecast will equal the sum of the statistical forecast and all overrides entered If you attempt to change this setting when overrides exist for the current project you will receive a warning and all overrides will be erased Manual reconciliation mode If this switch is on the override window will include a Retain button as well as a Commit button The Retain button is used to accept overrides without reconciling the hierarchy This is useful when working with large complex hierarchies where the reconciliation process takes some time In manual reconciliation mode you would typically enter and retain all of the overrides you wish to make 1 e for multiple items and then click the Commit button to perform the reconciliation once rather than having to wait for the program to reconcile after each item that you override Number of adjustment rows This setting controls the number of adjustment rows displayed in the Override view Allow disaggregation If this switch is on the Override
181. nvoke the context menu and then select Model gt Bass Diffusion Bass Diffusion Model settings B J Generate coefficients automatically Coefficient of Innovation p Coefficient of Imitation q Notice that now that we have more than 5 data points Forecast Pro Unlimited can automatically fit the coefficients and estimate the potential market from the data The estimated coefficients are pretty similar to the ones we used prior to having data however the estimate of the potential market is a good bit lower Forecasting sales for a new to world product prior to launch is extremely difficult Regardless of the forecasting method used you should be constantly revisiting your model assumptions as data becomes available and adjusting the model when appropriate This concludes Lesson 8 88 New Product Forecasting Lesson 9 Using Weighting Transformations Forecast Pro Unlimited includes a weighting transformation which will divide your historical data by user defined weights forecast the resultant deweighted series and then multiply reweight the forecasts This procedure can be useful in a variety of situations including adjusting for the number of working days in a month defining a seasonal pattern and supplying a growth curve for a new product In this section we will use the weights procedure to adjust for the number of weeks in each month The section will conclude with a discussion of how to apply weights in other
182. o 700 the 100 highest volume items would be assigned to group A the next highest 200 items would be assigned to group B and the remaining 700 would be assigned to group C The Series Count assigns the specified percentage of the total number of items you have to each group For example if A is set to 20 B is set to 50 and C is set to 30 Forecast Pro Unlimited will first rank all of the items from highest volume to lowest volume and then sequentially place the top 56 Pareto Analysis and Report Filtering ranked items into the A group until the number of A group items equals 20 of the total number of items It will then sequentially place items into the B group until the number of B group items equals 50 of the total number of items The remaining items 30 of the total number of series are assigned type C If selected the Group zero volume option will place any items with zero volume into group D Make sure that your settings match the ones above and click OK Sorting and Filtering the Pareto Output Right click on the Item Report view to display its context menu and select Item Report Design ox Cancel Apply Help Click the checkboxes for the four Pareto fields List Percent of Total Rank Cumul Percent and click OK Notice that the Item report now includes the four fields associated with the Pareto analysis before we discuss these fields let s sort the report to make it easier to read Click
183. o different forecasts If you plan to make overrides at more than one level of the hierarchy it is essential that you understand how Forecast Pro Unlimited performs the reconciliation Figure 4 below depicts a forecast hierarchy where ItemA1 has been overridden to equal 75 It is identical to Figure 2 Adjustments Made to More Than One Level 205 Total S 5 F 79 GroupA S 2 F 76 ItemA 1 ItemA2 ItemB 1 S 1 Seu S O 75 F F F 75 Figure 4 Let s now modify the above hierarchy by overriding the forecast for Total to equal 500 This results in the hierarchy shown in Figure 5 below Total S 5 O 500 F 500 GroupA S 2 F 200 ItemA1 ItemA2 ItemB 1 S 1 S 1 S 1 O 75 F 125 F 100 F 75 Figure 5 Notice that ItemB2 S 2 F 200 1 Forecast Pro Unlimited used the Statistical forecasts for GroupA and GroupB to determine the allocation proportions NOT the previously committed Forecasts displayed in Figure 4 Using the committed Forecasts from Figure 4 would have resulted in a dramatically different allocation 2 Forecast Pro Unlimited did not alter the committed Forecast value for ItemA1 because it had been explicitly overridden When Forecast Pro 206 Understanding How Forecast Overrides are Allocated Unlimited encounters an explicit override it considers the value locked and will not alter it This means that any needed allocations at a level containing locked forecasts will be made to the
184. oblems and will certainly decrease accuracy Ideally companies would either distribute returns to the months in which the products were shipped or maintain returns as an entirely different historic record Nevertheless listing sales as negative is common and must be dealt with in some way Beyond an expected decrease in accuracy for forecasts from a product with negative sales negatives pose a technical problem for product hierarchies Reconciling the Hierarchy 147 Multiplicative seasonal indexes cannot be extracted from a nonpositive series and additive indexes cannot be disaggregated to nested products Thus if the group level data contain negatives Forecast Pro Unlimited will use an additive index model and seasonal disaggregation will not be allowed 1 e the INDEXES flag will be ignored In the case of positive group level data with negative values in the constituent data the multiplicative adjustment of negative values may have a different effect than one expects a seasonal index of 1 5 to a sales figure 100 yields the value 150 Top down adjustment is also problematic when negative forecast values are involved Therefore Forecast Pro Unlimited clips negative forecasts to zero if you have specified top down disaggregation regardless of how you have set Allow negative forecasts in the Options dialog box in the Settings menu 148 Working With Scripts and Hierarchies Chapter 4 Using Forecast Modifiers By default Forec
185. of forecasts for the horizon when some of the actuals are zero thus preventing computation of the MAPE MAD is the Mean Absolute Deviation for the horizon over all series on the current script line Cumulative MAD is the cumulative MAD for all horizons up to and including the current horizon Examining the Analytic Output 103 MAPE is the Mean Absolute Percentage Error for the horizon over all series on the current script line Cumulative MAPE is the cumulative MAPE for all horizons up to and including the current horizon GMRAE is the Geometric Mean of Relative Absolute Error for this horizon Below Upper Limit is the fraction of times that the actual was at or below the upper confidence limit as set in Settings Options This allows you to calibrate the empirical upper limit to the theoretical upper limit This is useful when you are using the upper limit to set stocking levels Figures listed in the row below the last forecast horizon refer to all horizons Each group on the Navigator will produce such a report Comparing an Alternative Model Right click Monthly on the Navigator to display the context menu Select Model gt Very Simple Models gt Simple Moving Average and set the number of terms to 3 Then right click Monthly a second time and select Apply Modifier s to gt All items We have now forecasted all items using a 3 month simple moving average Select the group Monthly on the Navigator and view the Out of Sample Roll
186. oject and data files have not changed 1 e the time and date stamps match the project will restore the conditions present when the project was saved allowing you to continue your work 136 Saving Your Work If you open a project and the data files are not available the project will restore the conditions present when the project was saved thus you can review projects make adjustments etc even if you do not have access to the data files This will often be the case when sharing projects with colleagues Project Options ee Sum Your data appear to have been modified since you last saved your project Would you like to reforecast using the updated data Do not recalculate the forecast Recalculate the forecast and apply Project Settings v Modifiers Hot List v Overrides Cancel Help If you open a project and data files have changed a dialog box will appear allowing you to either generate new forecasts using the updated data or restore the conditions present when the project was saved 1 e do not recalculate the forecasts using the new data Project Files The project normally consists of a single zipped file with the extension FPZip The zipped file contains three separate data files The Project Settings File FPProj is an XML file containing the project settings and script definition The Project Tables File db or mdb is a Microsoft Access mdb or SQLite db databas
187. ollowed by Numeric Output If the Single Output file option is not selected each output filename will be the prefix followed by the corresponding input filename The Layout section of this tab allows you to specify the default data mode the orientation row vs column whether or not to include group level output and whether or not to include item level data Single output file Output a single Numeric Output file containing information for all forecasted items will be written If Single output file is not selected then a separate Numeric Output file will be written for each input file Break record up into lines If selected then each Numeric Output component specified on the Time Series Data tab see below will appear on a separate line of the Numeric Output file The Text Format section of this tab allows you to specify the conventions to use when outputting a text file You will only be able to edit these settings when the data mode is set to Txt text or Mit text input file format The Numeric Output View 177 The Time Series Data tab 1s used to define the data label fields to select the forecast components to include and to set their precision If you are outputting a fixed width text file then you may also set the column widths Attributes Include separate attribute fields for each level of the hierarchy If you used attribute fields in your input data files to define groups then you will most likely want to se
188. ommand line forecasting options and the output files to save in command line mode This tab s functionality was fully described in the Menu Items and Dialog Boxes section earlier in this chapter Important Notes 1 If there are spaces in the pathname you must include quotation marks as illustrated in the example above 2 If you do not want the Forecast Pro Unlimited menu to appear run the program minimized 202 Command Reference Chapter 6 Understanding How Forecast Overrides are Allocated The override facility in Forecast Pro Unlimited allows you to adjust the statistically generated forecasts Changes made at any level of the forecasting hierarchy will automatically reconcile all levels This chapter was written to clarify exactly how the reconciliation is performed and document cases where adjustments cannot be fully implemented due to conflicting overrides or program settings Adjustments Made to a Single Level In this section we will describe how Forecast Pro Unlimited reconciles the forecast hierarchy when overrides are made to a single level of the hierarchy Important If you restrict your overrides to a single level of the hierarchy the reconciliation process is simple and intuitive We strongly urge you to limit your overrides to a single level if at all possible 203 Figure 1 below depicts a simple forecast hierarchy prior to any overrides being entered Notice that at this point the Statistical forecasts equ
189. ontext menu You can also save an Excel report for the Formatted Forecast Reports 139 currently displayed item using the Save this page to Excel option on the Forecast Report view s context menu Item Reports Item Reports can be viewed on screen and saved to Excel These reports can contain statistical output such as the forecasting model specification and summary statistics as well as time series output such as history forecasts fitted values and confidence limits To open an Item Report you select View gt Item Report or click the yellow View Item Report icon O To save an Item Report you select Project gt Export gt Item Report or use the view s context menu You can specify the format and content of the report using Settings gt Item Report Design The operation of the Item Report Design dialog box is described in the Command Reference section of this manual Override Reports Override Reports can be viewed on screen and saved to Excel These reports list the items where overrides and or comments have been made To open an Override Report you select View gt Override Report or click the yellow View Override Report icon 4 To save an Override Report select Project gt Export gt Override Report or use the view s context menu You can specify the format and content of the report using Settings gt Override Report Design The operation of the Override Report Design dialog box is described in the Command Reference section o
190. orecast Report view This dialog box is invoked by selecting Settings gt Forecast Report Design or by selecting Forecast Report Design from the Forecast Report view s context menu 168 Command Reference oc ep i Include Historic Data Forecast Data Within Sample Out of sample Stats You can either select one of the four standardized report styles or define a custom report Include graph in output can be used in conjunction with any style report and specifies whether to include or omit a graph when saving a formatted forecast report to Excel A description of each report style appears below Forecast Only is a minimal display consisting solely of the forecasts Basic displays a listing of the forecasting model used a set of the most commonly used within sample statistics and a forecast display including confidence limits and summary statistics Standard is the default display It includes the expert selection logic if applicable the model details including model coefficients a full set of within sample statistics a listing of detected corrected outliers if outlier detection is active a listing of any overrides and the same forecast display found in the Basic style Complete displays everything found in the Standard display as well as a numeric listing of the historic values fitted values converted forecasts safety stocks and an expanded forecast display Custom allows you complete control over what
191. orn Muffins 2006 1 12 12 17496 COR 12 11 CASE 12 count Corn Muffins 2006 2 12 12 2916 COR 12 11 CASE 12 count Corn Muffins 2006 3 12 12 6804 COR 12 11 CASE 12 count Corn Muffins 2006 4 12 12 17496 2 COR 12 11 CASE 12 count Corn Muffins 2006 5 12 12 1944 COR 12 11 CASE 12 count Corn Muffins 2006 6 12 12 9720 2 __ COR 12 11 CASE 12 count Corn Muffins 2006 7 12 12 3888 COR 12 11 CASE 12 count Corn Muffins 2006 8 12 12 5832 2 __ COR 12 11 CASE 12 count Corn Muffins 2006 9 12 12 12505 5 COR 12 11 CASE 12 count Corn Muffins 2006 10 12 12 17496 COR 12 11 CASE 12 count Corn Muffins 2006 11 12 12 13608 COR 12 11 CASE 12 count Corn Muffins 2006 12 12 12 23328 COR 12 11 CASE 12 count Corn Muffins 2007 1 12 12 26244 __ COR 12 11 CASE 12 count Corn Muffins 2007 2 12 12 10692 COR 12 11 CASE 12 count Corn Muffins 2007 3 12 12 14580 COR 12 11 CASE 12 count Corn Muffins 2007 4 12 12 3888 COR 12 11 CASE 12 count Corn Muffins 2007 5 12 12 6804 COR 12 11 CASE 12 count Corn Muffins 2007 6 12 12 6804 COR 12 11 CASE 12 count Corn Muffins 2007 7 12 12 6804 COR 12 11 CASE 12 count Corn Muffins 2007 8 12 12 6804 v Record 4 lt 1of2441 gt ro amp ilter Search E Datasheet View Num Lock jD EREA The above example does not use attribute fields to define product groupings This is often desirable and is discussed in the Using Attribute Fields to Define a Hierarchy section In
192. ors 2002 11 12 12 74 77 102 71 bed 4 PG1 204 3 2 Staple Anchors 2002 11 12 12 103 157 114 5 PG1 203 4 3 Staple Anchors 2002 11 12 12 101 90 88 54 52 44 6 PG1 203 5 4 Staple Anchors 2002 11 12 12 109 90 75 109 199 129 7 8 44 gt gt Sheet1 AEJ The above example does not use attribute fields to define product groupings This is often desirable and is discussed in the Using Attribute Fields to Define a Hierarchy section In our example each data record consists of six header items in columns A through F followed by the historic data in the remainder of the row beginning in column G Each item is placed in a separate cell Columns A through F contain the following six items required items Variable name Up to 256 characters Variable description Up to 256 characters Starting year Must be an integer Starting period Must be an integer Periods per year Must be an integer TM OA w gt Periods per seasonal cycle Must be an integer See the Overview section at the beginning of this chapter for more details on these items The time series data begin in column G The starting year column C and starting period column D refer to the year and period for column G whether or not that cell actually contains data Thus in the example spreadsheet the first value for PG 204 2 is for January 2003 in column I even though the header defines the starting period as 11 and the starting year as 2002 120 Setting Up
193. otal gt Muffins gt Stuff Mart VA 20 01 ST 20 02 Expert Analysis Total gt Muffins gt Stuff Mart Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins Total gt Muffins gt Sids Club wil perform an out of sample test to select between these two approaches Total gt Muffins gt Total gt Muffins gt Food King i ge gt gt iiri The cumulative MAD for Exponential smoothing was 9 265 and for Box Jenkins was 17 579 Total gt Cakes gt Grocery Land The rolling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Total gt Cakes gt Food 4 Based on the lower MAD w use Exponential Smoothing Ready Arrange your display so that it includes both the Graph view and the Forecast Report view Right click on the Hot List to display its context menu and select Save Forecast Report A dialog box will appear allowing you to name the Excel file Name the file Hot List Report and save it Examine Hot List Report xls in Excel and verify that it contains a worksheet for each item on the Hot List and that the contents and format matches the currently displayed graph and report views 36 The Basics Close the Graph window and the Forecast Report window Open the Numeric Output Preview window by clicking the yellow Preview Numeric Output icon ED EE Forecast Pro Unlimited 64 bit Tutorial 1 M E Gia File Settings Operations Pro
194. ous Custom Modifiers suceii ses wet secede seid ee eitecndnehi 158 Command Referente sissanta aaaea a aanas sasata 161 Operations OVE Ie Worren ae a ie ae louaee eel 161 The Forecast Pro Unlimited Interia Escena 162 The Forecast Report VIW mereoecnaloae a ceedeeianedeselones 168 PUA E E E A A E E A A E E 170 The Override Forecasts View ccccscecosccecececsccececcececsecececcececsececsececees 172 Ehe Keni IRC POU VIEW nopecuren n Al 175 TheOveride Report View sssecucalectes ctactiyaverdiactaieiyaleadad ee a 175 Ihe Outtier Repon View irresninern a a a ecaoetete 176 The Nimeni Out VEW sesno esnen di eae eee anete eee 176 Tae Event VIAMAC Ci eaaa tea ices 179 Mentu tems and Dialog BORGS carecia waren tindueueesnar eked 181 Workime With Super Projeci S merir edo etaent nies litres 198 Command line OQ peratl On ssia a dees quieks 201 Understanding How Forecast Overrides are Allocated sccccsees 203 Adjustments Made to a Single Level oo eccccccccccccceseeeeeeeeeeeaaeenseeeeeess 203 Adjustments Made to More Than One Level cc ccceeccccccececeeesseeeeeeeees 205 Examples Where Overrides Cannot be Fully Allocated eeeeeeees 207 UV OD ae aoe a eicetneeet yearn ete eat eee eee 209 PDD ECMOINES se ceuhceesctuctdssecaustescstiesssceubscesstuccsssosersceassuieaseswansasesesnsssssensaseesvaeens 211 Speeding Up th Pro Sra ices dsnsudenciesidendacedannddndavendsntadestvedilendeartsadentsiestased 211 End user
195. ove Me difier BLU 12 11 Collapse All APP 12 11 Expand All To Current Cakes n CASEI TZTOUNt Corn Muffins P Stuff Mart Total gt Muffins gt Stuff Mart gt COR 12 11 VA 20 01 ST 20 02 Raw hierarchy is Total gt Muffins gt Stuff Mart gt COR 12 11 Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins wil perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 3 037 and for Box Jenkins was 3 097 The rolling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method The Navigator s context menu provides a convenient way to build a Hot List apply forecast modifiers and control the display of the Navigator tree Most of the options are self explanatory however a few warrant some explanation The options under Add to Hot List are used to copy items onto the current Hot List the Hot List is described in the next section Children Parents and Siblings refer to one level down on the current Navigator branch one level up on the current branch and the same level on the current branch respectively On the Analysis submenu Overrides refer to items with direct overrides and 166 Command Reference Affected refers to items with indirect overrides 1 e items where a direct override elsewhere in the hierarchy changed the item
196. override The Override Forecasts View 173 view s context menu allows you to rename the override row labels and add or subtract rows on the fly Forecast contains the current committed forecasts These are the values that are displayed on the graph and the values that will be written as forecasts in any output files that you save to disk The Forecast values may differ from the Statistical values if you have committed to overrides for the currently displayed forecasts or any other forecasts in the hierarchy that would impact the currently displayed forecasts There are three steps in the override process selecting the point or points to override entering the override s and committing to the override s Points can be selected in the override window or in the graph window The sum of the values for the points selected will be displayed in the Value edit box If you want to adjust the selected points by a certain percentage enter the percentage in the Percent edit box and press the button If you want to adjust each selected point by a certain increment enter the increment in the Increment edit box and press the button If you want to change the sum of the selected points to a defined value enter the value in the Value edit box and press the button Adjustments made using the edit boxes will appear in the target override row specified to the left of the Commit button You can also enter overrides for a single point by typing a n
197. oz Low Fat Pound Cake 2007 1 12 12 824 2 494 1 767 2 700 20 LE 20 02 CASE 20 oz Lemon Pound Cake 2007 1 12 12 1 351 1 975 1 767 3 118 21 CO 20 01 CASE 20 oz Coconut Layer Cake 2007 1 12 12 0 0 4 368 3 360 22 CH 20 01 CASE 20 oz Chocolate Layer Cake 2007 1 12 12 0 0 9 240 9 240 23 CA 20 01 CASE 20 oz Carrot Layer Cake 2007 1 12 12 0 O 14280 11 760 24 BU 20 02 CASE 20 oz Butter Pound Cake 2007 1 12 12 5 715 1 035 2 595 5 190 25 Sids Club VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 12 061 9 072 10 872 15 840 1 26 LF 20 02 CASE 20 oz Low Fat Pound Cake 2007 1 12 12 27 CO 20 01 CASE 20 oz Coconut Layer Cake 2007 1 12 12 20196 12672 18144 24192 2 28 CH 20 01 CASE 20 oz Chocolate Layer Cake 2007 1 12 12 29 CA 20 01 CASE 20 oz Carrot Layer Cake 2007 1 12 12 8 964 6 480 7 920 12672 1 30 BU 20 02 CASE 20 oz Butter Pound Cake 2007 1 12 12 31 Grocery Land VA 20 01 CASE 20 oz Vanilla Layer Cake 2007 1 12 12 32 LF 20 02 CASE 20 oz Low Fat Pound Cake 2007 1 12 12 1 479 2 474 3 271 1 664 33 LE 20 02 CASE 20 oz Lemon Pound Cake 2007 1 12 12 2 030 3 325 4 073 2 463 d 4 gt Sheet1 F Ca gees a Zi om 222 aa Pail ALO heh RDM i Ready og 110 Forecast Pro Unlimited will read spreadsheets formatted in this fashion properly ODBC attribute fields If you are using ODBC the first attribute field must be named ItemId0 the second attribute field must be named ItemId1 etc All attribute fields must be t
198. pecific item can also be specified using the Upper modifier Menu Items and Dialog Boxes 183 Lower confidence limit Specity the percentile for lower confidence limits The lower confidence limit for a specific item can also be specified using the Lower modifier Safety stock lead time Specify the lead time for the safety stocks The specified lead time appears highlighted in the Safety Stock section of the Forecast Report and determines the values written to the Numeric Output file Fractional entries e g 1 5 are permitted options es Column delimiter Space v ignore trailing zeroes Text Files Display Precision xD Gee Sie The Formats tab controls the formatting of the input and output Decimal separator Specify whether a period or a comma is used for the decimal point The program s default is the convention appropriate for the United States which is the period Column delimiter Specify whether items in an MLT file are separated by spaces commas or tabs 1 e are the files space delimited comma delimited or tab delimited Thousands separator Specify the thousands separator used for input MLT files The choices are none comma and period Forecast Pro Unlimited does not use thousand separators in output Ignore leading zeros If this option is selected then leading zeros prior to the first nonzero data point will be ignored 1 e the data has not started yet and the zeros are interpreted as plac
199. project to the new forecasts If this option is not selected all overrides in the project will be ignored when running from the command line Settings If this option is selected the command line run will use all of the settings associated with the project e g all settings in the Settings dialog box numeric output formatting etc If this option is not selected the default settings 1 e the settings that have been saved as the defaults for use with new projects will be used when running from the command line Project settings are saved in the project file FPProj Default settings are stored in the ForecastProUnlimited ini file 188 Command Reference The remaining options specify the output files to generate when the project is run from the command line Numeric output If this option is selected the command line run will save the numeric output You have the option of saving this file for all items forecasted or if you select Hot List only just for the items listed on the Hot List Forecast Report If this option is selected the command line run will save a formatted forecast report file to Excel You have the option of saving this file for all items forecasted or if you select Hot List only just for the items listed on the Hot List Keep in mind that these files can potentially be very large Outlier report and Override report If either or both of these options are selected the command line run will save the specified
200. r each item forecasted Each report worksheet will contain the currently displayed graph for the item and the currently displayed forecast report Thus in addition to allowing you to view information on screen the graph view and the forecast report view also are used to design the Excel based forecast report Click Project gt Export Notice that both of these output files can be saved for either all items forecasted or just the items on the current Hot List Forecast Pro Unlimited 64 bit Project03 T 3 Sh 2 ei File Settings Operations Project View Window Hi 00655 6640686 0 0 0006 Stuff Mart 2007 1 gt through 2012 6 Holdout 0 3 Total z Project03 Graph ol o Muffins COEL 123 Bakery Inc COR 12 11 Stuff Mart Customer BRA 12 11 BLU 12 11 A A EE O E E E NE OR APP 12 11 OAT 12 11 BY a a a E OORA 3 Sids Club L Se ee ee eee rer it S LTTE TEELT TELET TAT TD See COR 12 11 BRA 12 11 OO E RR SE IE See SE Sey EA ee S D PEA EES een i BE S BLU 12 11 APP 12 11 Se ee eee Se Ce es ee a Ai X 79000 Grocery Land COR 12 11 La rerrfri elie pee ple a ee ee ees ee ANA NN 1 Lere BLU 12 11 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan PrE E History E Forecasts EE Forecast Interval 3 Food King COR 12 11 Project03 Forecast Report oo gt BLU 12 11 Forecast Report for Stuff Mart APP 12 11 S Cakes Customer P Stuff Mart T
201. re computed using a bottom up approach Indexes INDEXES directs Forecast Pro Unlimited to calculate the seasonal indexes at the indicated group level and use them to deseasonalize the histories for the nested items and groups The deseasonalized series are then forecasted and as a final step reseasonalized This approach works well when the items share the same seasonality It allows one to deal with items whose histories are too short to extract seasonality directly You cannot nest INDEXES groups within each other Model parameters are reestimated for each item of the INDEXES group Miscellaneous Custom Modifiers The modifiers listed below can be entered from the keyboard via Custom Modifier on the Navigator s context menu Custom Modifier LOWER Set the lower confidence limit equal to the value L must be between 0 1 and 50 0 inclusive Custom Modifier UPPER u Set the upper confidence limit equal to the value u U must be between 50 0 and 99 9 inclusive Custom Modifier CONF Lu Set the lower confidence limit equal to the value and the upper confidence limit equal to u must be between 0 1 and 50 0 inclusive and u must be between 50 0 and 99 9 inclusive Custom Modifier LEADTIME n Set the lead time for the safety stock to n The specified lead time appears highlighted in the Safety Stock section of the Forecast Report and determines the values written to the Numeric Output file Fractional entries e g 1 5 ar
202. rent script file and creates the forecasts This option is only available when a script has been defined and the data has been read in This task can also be accomplished using the red Script icon Operations gt Convert to SQLite Operations gt Convert to SQLite is only available in the 32 bit version of Forecast Pro Unlimited It is used to convert a Forecast Pro Unlimited project that was saved using a Microsoft Access database file into a Forecast Pro Unlimited project that uses a SQLite database file This option is usually used when one is upgrading from the 32 bit version of Forecast Pro Unlimited which allows the database file to be either Microsoft Access or SQLite to the 64 bit version of Forecast Pro Unlimited which only supports SQLite and wishes to convert their existing projects so they can be read into the 64 bit version When you convert projects we recommend that you save your converted projects using a different project name so that you will still have a copy of the old project The Project Menu The project menu is used to import settings Hot Lists overrides and modifiers from other projects to export 1 e save to disk Numeric Output files and report files to set project passwords and to access the Project Manager Project gt Import Project gt Import gt Project Settings From is used to import project settings from a saved project into the current project The settings include all selections on the Optio
203. report s The format and contents including all items vs Hot List only will match the current settings in the project or the defaults if you ve specified to use them Project If this option is selected the command line run will update and save new project files Normally the only part of the project that will change during the command line run is the binary file fcb This is a snapshot file that allows you to open up the project without reading in the data and generating new forecasts once I a Basic _ Formats Outliers Overides Command Line Pareto Analysis Advanced Controls Weighting Basis iat y V Forecasts Periods 1 to 12 Ranking Basis The Pareto Analysis tab allows you to specify how the ABC codes should be assigned History and Forecasts These settings allows you to indicate whether the ranking should be performed using the historic demand or the current forecasts and allows you to set the span for your selection Hierarchy level The ABC codes are assigned to a single level of the hierarchy The Hierarchy level drop down allows you to pick the level to use Menu Items and Dialog Boxes 189 The Ranking Basis section allows you to set the thresholds for the classifications Volume This option allows you to set the codes based upon the cumulative volume of each group For example if A is set to 80 B is set to 15 and C is set to 5 Forecast Pro Unlimited will first rank
204. resave your zipped project Forecast Pro Unlimited will zip the updated local project files and save the updated FPZip file to the network drive Forecast Pro Unlimited defaults to saving zipped projects To save and open unzipped projects you select FPProj as the file type in the File gt Save as and File gt Open dialog boxes Numeric Output Files Numeric Output Files can contain time series output such as history forecasts fitted values and confidence limits as well as statistical output such as the forecasting model specification and summary statistics These files can be saved in text spreadsheet ODBC or XML formats You can include output for either all items forecasted or just for the Hot List Generally speaking if you will be importing the forecasts into another application these are the files you will want to use You can specify the format and content of Numeric Output File using Settings gt Numeric Output Design The operation of the Numeric Output Design dialog box is described in the Command Reference section of this manual 138 Saving Your Work You can preview the contents of the current Numeric Output File using the Numeric Output view You can open this view using View gt Numeric Output or using the yellow Preview Numeric Output icon 9 To save a Numeric Output file for all items forecasted select Project gt Export gt Full Numeric Output or click the purple Save Numeric Output icon To save a Numeric Outpu
205. ro Unlimited and a wide variety of databases This 1s accomplished through intermediary ODBC drivers that lie between Forecast Pro Unlimited and your database You must obtain the driver from the database manufacturer or a third party and install it according to the directions provided ODBC drivers are available for many database products including Access Oracle DB2 SQL Server FoxPro Paradox and Btrieve Database structure Forecast Pro Unlimited reads data from structured tables or views defined in the database Ordinarily the tables created for the Forecast Pro Unlimited interface are just a subset of the entire database Here is an example of a of a data table formatted for Forecast Pro Unlimited Using ODBC 125 Table Tools 123 Bakery ODBC Copy Database Access 2002 Home Create External Data Database Tools Datasheet Security Warning Certain content in the database has been disabled Options Description Hist_Year Hist_Period Ppy Ppc Hist_Value a a CASE 12 count Corn Muffins 2005 6 12 12 1944 i COR 12 11 CASE 12 count Corn Muffins 2005 7 12 12 3888 COR 12 11 CASE 12 count Corn Muffins 2005 8 12 12 5832 COR 12 11 CASE 12 count Corn Muffins 2005 9 12 12 8748 COR 12 11 CASE 12 count Corn Muffins 2005 10 12 12 16524 COR 12 11 CASE 12 count Corn Muffins 2005 11 12 12 16524 COR 12 11 CASE 12 count Corn Muffins 2005 12 12 12 23328 COR 12 11 CASE 12 count C
206. rt Modifiers 194 Import Overrides 194 Import Project Settings 193 Include group totals 185 Include iteration statistics 186 Incremental adjustments 187 Installation 32 bit 10 64 bit 10 automatic 9 Item report 140 Item Report View 175 Leading zeros 184 License agreement 215 Main window 20 Manage Event Codes 179 Manage Events 179 Manage Projects 195 Manual reconciliation mode 187 Maximum iterations 186 M Competitions 101 Mdb files 137 Missing values 115 185 MLT 118 123 Modifiers 157 196 importing 132 Multiple level forecasting 144 Navigator 166 Negative forecasts 183 New 181 Numeric Output Design 176 Numeric Output Files 138 Numeric Output View 176 Numeric Precision 185 ODBC 118 125 ODBC Connect 192 Open 181 Operations Forecast 193 Operations ODBC Connect 192 Operations Read Data 192 Operations Script 192 Options dialog box 182 Outlier detection correction 156 186 Outlier Report view 176 Outlier reports 140 Outliers 70 Output directory 183 Override Report view 175 Override reports 140 Override view 172 Overrides importing 131 Passwords 194 Percentage precision 185 Periods per cycle 117 Periods per year 117 Point forecast 12 Power transformation 159 Print Preview 182 Print Setup 182 Printing 182 Project Manager 195 Promotions 71 Read Data 192 Safety stock lead time 184 Save 181 Save as 182 Script 143 192 defining 143 multiple level 144
207. rval 170 Command Reference The Include tab allows you to the select components to be displayed on the graph The components can also be toggled on or off using the Graph view s context menu Selecting Data only toggles off all of the active components with the exception of the history Graph Seige Include Components Layout items Display Y Axis Scale a Cowes ee The Components tab includes three sections The Display section allows you to select the graph type Time series displays a graph where the y axis covers both the historic and forecast period The All option will display the entire data set in a nonscrollable display If the All option is not selected the Periods option allows you to set how many periods should be included in a scrollable display Year over year displays a graph where the y axis is one year long and the data for each year are stacked on the display The Years option allows you to specify the number of years to include in the display Important note Because the two graph types are fundamentally different Forecast Pro Unlimited maintains your settings for these graph types separately The Labels section allows you to define labels for the X and Y axis and add titles to the graph The include variable name option will use the variable name followed by the description as the graph s subtitle The Clear button erases the current labels The Y Axis Scale section controls th
208. s scripts and then imports the component projects 52 Collaborating With Colleagues modifiers and overrides The end result is a super project that includes all of the forecasts created in the component projects We will now use the Project Manager to create a super project for our current example Close the current project by selecting File gt Close and then open a new blank project by selecting File gt New Select Project gt Manage to open the project manager The first step is to specify the component projects that you would like to combine Click the Add button select Tutorial 4 USA Tutorial 4 Canada and Tutorial 4 Mexico and click Open f A yyy S pe po po g g The Import options allow you to specify what you wish to import from the component projects When first creating a super project you will generally import everything When updating a super project you may want to pick and choose what to import The Erase first options for modifiers and overrides are only relevant if you are updating a super project If selected they will erase any existing modifiers and overrides prior to loading in the modifiers and overrides from the component projects Activate the checkbox to the left of each project Make sure that your selections match the ones above and click Apply The program will prompt you to save the super project Name the project Super Project Example and click Save The super project is
209. s lca vV Forecasts Cob CASE 12 count Corn Muffins Alle l Stuff Mart onf Limits Total gt Muffins gt Stuff Mart gt COR 12 11 a VS 20 M1 Stat Forecast Baseline Raw hierarchy is Total gt Muffins gt Stuff Mart gt COR 12 11 Fitted Expert Analysis Hist Interval Copy Imag gt gt Stuff Mart gt APP 12 Using rule based logic have narrowed down the choice to exponential smooth Save Image As Total gt Muffins gt a Mart gt gt OAT 1211 1 wil perform an out of sample test to select between these two approaches Total gt Muffins gt Sids Total gt Muffins gt Sids Cb gt COR 12 11 Total gt Muffins gt Sids Club gt BRA 12 11 Total gt Muffins gt Sids Chub gt BLU 12 1 3 The cumulative MAD for Exponential smoothing was 3 037 and for Box Jenkins was 3 097 ol m z The rolling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Ready The Graph Settings dialog box allows you to customize the Graph view This dialog box is invoked by selecting Settings gt Graph Settings or by selecting Graph Settings from the Graph view s context menu The Settings dialog box contains four pages or tabs We will discuss each in turn Graph Settings Time Series Include Components Layout tems Data and Forecast Elements to Include Data only VI Historic values V Forecasts G ted hist V Confidence limits Fitted values Statistical forecasts Historic inte
210. s first lesson provides an overview of Forecast Pro Unlimited and guides you through a sample forecasting session Before you can use Forecast Pro Unlimited you must install it If you have not already done so follow the installation instructions discussed in Chapter 2 The Main Menu To start Forecast Pro Unlimited double click the Forecast Pro icon on your desktop or click the Start button select All Programs and click the Forecast Pro Unlimited icon After the program is loaded you will see a display like the one below 19 Lh Forecast Pro Unlimited Projectos menu bar gt File Settings Operations Project View Window Hi toolbar gt OGaisod 65 a 0 2 A OO Ae dialog bar gt Navigator Unavailable Ls Project03 Forecast Report Navigator gt lt Forecast Report window Hot List gt status bar gt Read The main window entitled Forecast Pro Unlimited consists of a menu bar a toolbar a dialog bar a Navigator currently unavailable a Hot List area a Forecast Report window and a status bar The menu bar provides access to all procedures The most commonly used procedures can also be accessed instantly via the icons on the toolbar The dialog bar is currently blank After data have been read in the dialog bar will include the span of the data and the specified holdout sample The Navigator and Hot List are currently unavailable After data have been read in the Navigator and Hot List can be us
211. s forecast The Model Events Weights Outliers Top down and Indexes options are all used to specify forecast modifiers The most commonly used modifiers can be applied directly using the menu options The less commonly used modifiers can be entered from the keyboard using the Custom Modifier option A list of all supported modifiers and their function is found in the Using Forecast Modifiers chapter of this manual The Hot List Placing items on the Hot List allows you to efficiently navigate work with and report on a subset of the items listed on the Navigator Items can be added to the current Hot List by dragging from the Navigator or by using the Add to Hot List option on the Navigator s context menu When you select an item on the Hot List Forecast Pro Unlimited will immediately select the item on the Navigator and update the affected views ES Forecast Pro Unlimited 64 bit ProjectO4 bons r T cn am Sl File Settings Operations Project View Window Help 0000066 2016 oaos COR 12 11 2007 1 gt through 2012 gt Holdout 0 3 Total Muffins Stuff Mart COR 12 11 BRA 12 11 BLU 12 11 E APP 12 11 a a a a a E E S 4 OAT 12 11 Sids Club COR 12 11 a debe a te tated E E ake tok weiieiaiieiieiote BRA 12 11 tl UlC ine RC i Tl eee Oh 2 ee Ae nnn o 6 Seemed ENED o gt ee ee Ye APP 12 11 Grocery Land COR 12 11 BLU 12 11 APP 12 11 Food King CO
212. s from the two member groups In this case the entire hierarchy would be reconciled using top down aggregation Usually in a hierarchy involving three or more levels of aggregation you will want to place the YTOPDOWN modifiers somewhere near the middle Two things happen as we move from item level data upwards through the hierarchy The effects of irregularity decrease through aggregation Statistical models become more complex and distinct from each other Thus the signal to noise ratio increases as we move upwards through the hierarchy Now consider the case where both the TOPDOWN and INDEXES keywords are used for Retail and Commercial In this case Forecast Pro Unlimited extracts seasonal indexes for these groups at the group level It then deseasonalizes each item level history by using the indexes from the parent group forecasts the resulting nonseasonal data and then reseasonalizes the forecasts The forecasts are then reconciled as already described A note about negative values In a multiple level problem it is assumed that the data are basically nonnegative the aggregate level data must be non negative but the item level data can include a few negatives Negative sales figures are relatively common since many companies register returns as negative sales Furthermore returns are often accumulated on the books and taken as occasional hits on sales While this may make good accounting sense it raises forecasting pr
213. s having zero volume will be placed into group D Options aaa Basic Formats Outhers Overides Command Line Pareto Analysis Advanced Controls Performance 190 Command Reference The Advanced Controls tab allows you to set expert selection options control the timing of some program operations and adjust how frequently Forecast Pro Unlimited checks for program updates Adjusting the expert selection and performance options can improve processing speed for forecasting applying forecast modifiers and saving projects Exclude ARIMA If this switch is on Forecast Pro Unlimited s expert selection mode will not consider Box Jenkins models This will speed the forecast generation process considerably Exclude seasonal simplification If this switch is on Forecast Pro Unlimited s expert selection mode will not consider seasonally simplified forms of exponential smoothing models If you are forecasting data where the number of periods per cycle is greater than 13 e g weekly data this will speed the forecast generation process considerably Automatic recalculation If this option is selected Forecast Pro Unlimited will automatically recalculate the forecast and re reconcile the hierarchy every time you apply a forecast modifier For large hierarchies this can be time consuming If you turn this option off when you specify a forecast modifier the forecasts will not be updated until you click the red Forecast ico
214. sed create a super project containing the consolidated forecast Working With Super Projects 199 Creating a super project The steps to create a super project are 1 Create the data files for the component projects The super project s script will include all of the component projects data files Therefore you need to construct the data files for the component projects so that when they are combined they create the consolidated hierarchy correctly 2 Select the number of override rows required and other settings To import the component projects overrides into the super project the number of override rows needs to be consistent across the component projects To ensure a consistency between the statistical forecasts in the component projects and the super project you will want to decide on all options relating to the forecasts e g forecast horizon confidence limits settings outlier correction settings etc up front and keep them consistent across the component projects 3 Create the component projects 4 Use the Project Manager to create the super project Prior to creating your first super project you should work through the hands on section of Lesson 4 of the Tutorial section of this manual Collaborating With Colleagues which walks you through the process of using the Project Manager to create a super project Updating a super project How you update your component projects and super project will depend on the det
215. selection Forecast Pro Unlimited s default model selection procedure In this lesson you will use forecast modifiers to dictate the forecasting models to be used for specific items Specifying Forecast Modifiers for Individual Items Start up the program and click the red Script icon 9 to call up the Define Script dialog box Double click on ACME Hardware to place it on the first line of the script Click OK to accept the script Click the red Read Data icon B to read in the data and then the red Forecast icon to generate the forecasts Fully expand the Navigator using the Expand All option on its context menu and open the Graph view by clicking its green icon Select Total gt USA gt PG1 204 2 Your display should now match the one shown below 39 ZE Forecast Pro Unlimited 64 bit Projects NN ss _ a a e lt lt fam File Settings Operations Project View Window Hi 006 0566408604 90006 PG1 204 2 2008 gt 11 through 2012 1 Holdout 0 PG1 204 2 Cases GFCI Ivory ar er ae a a 2011 Jan 2012 Jan HB Forecasts WM Forecast Interval Project04 Forecast Report Forecast Report for PG1 204 2 GFCI vory Total gt USA gt PG1 204 2 Raw hierarchy is Total gt USA gt PG1 204 2 Expert Analysis Using rule based logic I have narrowed down the choice to exponential smoothing or Box Jenkins wil perform an out of sample test to select between these two approaches T
216. sent the forecasts and or models used to colleagues The tem Report can be viewed on screen and saved to Excel This report can statistical output such as the forecasting model specification and summary Statistics as well as time series output such as history forecasts fitted values and confidence limits The Override Report can be viewed on screen and saved to Excel This report lists items where overrides and or comments have been made The Outlier Report can be viewed on screen and saved to Excel This reports lists items where outliers have been detected and or corrected The following sections discuss these output files in more detail Forecast Projects Forecast Projects allow you to save your forecasting session so that you can return later and pick up where you left off or to share the session with others The forecast project saves the data forecasts overrides Hot List modifiers etc as they currently exist in memory If you update your input data files after saving a project when you reopen the project you ll have the option of either generating new forecasts using the updated data or restoring the conditions present when the project was saved 1 e not recalculating the forecasts using the new data Opening Projects To save a forecast project you select File gt Save or click the blue Save Project icon To open a forecast project you select File gt Open or click the blue Open Project icon If you open a pr
217. sers Public Documents Forecast Pro TRAC Input Horizontal mit Es File Edit Search View Tools Macros Configure Window Help a x Ose 8 amp 6 h68 Bl BA2SITUOFC AUR SEM o R xl SKU Description Start Year Start Period PPY PPE Fa SKU 001 Product 1 2006 1 12 117497 153276 241443 218709 20289 SKU_002 Product 2 2006 1 12 12 159 L355 159 159 1957 SKU 003 Product 3 2006 1 12 12 443 469 251 SKU_004 Product 4 2006 1 12 12 403 372 381 SKU_005 Product 5 2006 1 12 12 SKU_006 Product 6 2006 1 12 12 2107 2097 2135 2165 2205 SKU_007 Product 7 2006 1 12 12 90000 87000 111000 108000 77000 SKU_0086 Product 8 2006 1 12 12 2783 7 3746 94 6404 38 5074 96 4526 SKU_009 Product 9 2006 1 12 12 12344 13970 7 13587 9 13109 5 12152 SKU_010 Product 10 2006 1 12 12 2496 26 2485 05 2639 59 2649 48 2313 m E amp Raia ne eS ER Mey era AAA ei Fe cee oe EINE POEL Wi SO AUS treet Pe Sec eeree Ce SRE RN f a A AMIK Text MLT Formats 123 The above example does not use attribute fields to define product groupings This is often desirable and is discussed in the Using Attribute Fields to Define a Hierarchy section below The header consists of the first six items Variable name Up to 256 characters enclosed in quotes Variable description Up to 256 characters enclosed in quotes Starting year Must be an integer Starting period Must be an integer Periods per year Must be an
218. st Project Start Forecast Pro Unlimited select File gt Open and select the project Tutorial 3 June 2012 The dialog box below appears 44 Updating a Forecast Project cocon E Your data appear to have been modified since you last saved woject Forecast Pro Unlimited has noticed that the forecast project Tutorial 3 June 2012 and the data file 723 Bakery xls are out of sync It is giving you two options If you select Do not recalculate the forecast Forecast Pro Unlimited will open the project and restore the forecasts session as 1t existed when it was saved last month t will not read the new data It will not revise the forecasts Select Do not recalculate the forecast and click OK to verify this Notice that the historic data ends in May of 2012 and the first forecast period is June 2012 Now select File gt Open and select the project Tutorial 3 June 2012 again The data file and project are still out of sync so the dialog box reappears If we now select Recalculate the forecast and apply Forecast Pro Unlimited will read in the revised data generate new forecasts and if you request them restore the project settings Hot List forecast modifiers and overrides Select Recalculate the forecast and apply and click OK Expand the Navigator and select Total gt Muffins gt Stuff Mart gt BRA 12 11 Notice that the historic data now ends in June 2012 and the first forecast period is July 2012 Notice
219. sting is that it separates the process of forecasting from that of goal setting and makes it systematic and objective 11 Objective quantitative forecasting can help almost any business substantially There is in other words value added for business The future is uncertain and this uncertainty must be represented quantitatively Statistical forecasting represents uncertainty as a probability distribution Two kinds of information are needed to describe the distribution the point forecasts and the confidence limits A point forecast is the mean value of the distribution of future values and can be thought of as a best estimate of the future value Its upper and lower confidence limits describe the spread of the distribution above and below the point forecast Forecast Pro Unlimited depicts this information graphically as well as numerically File Settings Operations Project Vi 06055664 066 044 00006 Connect gt through 2010 5 gt Holdout 0 Rea The upper confidence limit is often calibrated to the ninety fifth percentile This means that the actual value should fall at or below the upper confidence limit about 95 of the time You can set the percentiles of both the upper and lower confidence limits Let s illustrate this idea with an example Suppose you were in charge of forecasting widget sales for your company If you wanted to determine expected revenues for next month you would be most i
220. sts In this lesson we will explore how Forecast Pro Unlimited supports collaborative forecasting Stand alone Project vs Super Project There are two different strategies for working with others using Forecast Pro Unlimited sharing a single stand alone project and consolidating multiple projects into a super project using the Project Manager There are pros and cons to each approach Sharing a stand alone project is by far the simplest way to work with others to establish the final forecasts Using this approach the forecaster begins by 47 creating forecasts for all items that need to be forecasted enters any desired overrides and saves a forecast project often to a network drive The project can then be opened by anyone using Forecast Pro Unlimited Forecaster or Collaborator licenses to review make changes etc If there is a third individual who needs to review the project that person would do so after the second individual has updated the project Alternatively the super project approach allows you to break large forecasting jobs into smaller pieces that can be worked on separately and then consolidated To implement this approach you first create forecast and save separate component projects and then use the Project Manager to combine the component projects into a new super project allowing you to view and manipulate the consolidated forecast A forecasting process that uses a stand alone project 1s much simpler to
221. t file for the current Hot List you select Project gt Export gt Hot List Numeric Output or use the Save Numeric Output option on the Hot List s context menu Formatted Forecast Reports Formatted Forecast Reports can be saved to Excel You can save these reports for the currently displayed item all items on the Hot List or all items forecasted The Excel workbook will include a separate worksheet for each item These reports are convenient if you wish to present the forecasts and or models used to colleagues Each report contains the information found in the current Forecast Report view and optionally the graph found in the current graph view You can specify the format and content of Formatted Forecast Report using Settings gt Forecast Report Design and Settings gt Graph Settings The operation of the Forecast Report Design and Graph Settings dialog boxes are described in the Command Reference section of this manual To save a Forecast Report file for all items forecasted you select Project gt Export gt Full Forecast Report or click the purple Save Formatted Forecast Report icon To save a Forecast Report file for the current Hot List you select Project gt Export gt Hot List Forecast Report or use the Save Forecast Reports option on the Hot List s context menu You can print a forecast report for the currently displayed item using File gt Print the blue Print icon or the Print this page option on the Forecast Report view s c
222. t have a separate license to use the Software on his or her Computer 4 LICENSE RESTRICTIONS You acknowledge that the Software and its structure organization and source code constitute valuable trade secrets of BFS You shall not nor shall permit assist or encourage any third party to e copy modify adapt alter translate reverse engineer decompile disassemble or attempt to derive the source code for the Software e merge the Software with other software and or create derivative works from the Software e sublicense distribute publish sell lease rent loan or otherwise transfer or allow access to the Software to any third party e use the Software in the operation of a service bureau e defeat disable or circumvent any security measures BFS may use to prevent unauthorized use or copying of the Software 216 Appendixes 5 TRANSFER OR REPRODUCTION You may not transfer or reproduce the Software with the exception of making a maximum of two 2 copies of the Software to be used for backup purposes only When using a Computer with a hard disk one copy of the Software may be installed on the hard disk provided that the copy is removed if the Software is used on another Computer 6 LIMITED WARRANTY THE SOFTWARE THE DOCUMENTATION AND ANY OTHER MATERIALS THAT MAY BY BE PROVIDED BY BFS ARE PROVIDED AS IS WITHOUT ANY WARRANTY OF ANY KIND BFS HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES WITH REGARD TO THE SOFTWARE
223. t we worked with in previous lessons Click the light blue Options icon to invoke the Options dialog box and then select the Pareto Analysis tab 55 The Pareto Analysis tab allows you to specify how the ABC codes should be assigned The Weighting Basis section allows you to indicate whether the ranking should be performed using the history forecasts or a combination of the two and allows you to set the span for your selection The codes are assigned to a single level of the hierarchy The Hierarchy level drop down allows you to pick the level to use The Ranking Basis section allows you to set the thresholds for the classifications The Volume option allows you to set the codes based upon the cumulative volume of each group For example if A is set to 80 B is set to 15 and C is set to 5 Forecast Pro Unlimited will first rank all of the items from highest volume to lowest volume and then sequentially place the top ranked items into the A group until their cumulative volume equals or exceeds 80 of the total volume It will then sequentially place items into the B group until the cumulative volume of the A and B items equals or exceeds 95 80 15 The remaining items 5 or less of the cumulative volume are assigned type C The Series Count option allows you to assign specific numbers of items to each group For example if you had 1 000 items and you set the A group to 100 the B group to 200 and the C group t
224. tents Explore the options on this dialog box If you are unsure of the function of any selection click the Help button for a description Saving the Forecasts 37 The settings you select will be used for your current project If you click the Set as Default button on the displayed tab the current settings will also be saved as the default to use for all new projects Exit the dialog box Click the purple Save Numeric Output icon A dialog box will appear allowing you to name the file Name the file Test Numeric Output and save it Examine the file and verify that its contents and format matches those specified in the Numeric Output Design dialog box Saving the Project Our final step will be to save our current forecasting session as a project Saving a forecast project allows you to return later and pick up where you left off or to share the session with others Select File gt Save As and save the project using the name fest project Be aware that a forecast project saves the data forecasts and overrides that are currently in memory If you update your input data files after saving a project when you reopen the project you Il have the option of either opening the project as it existed when you saved it or reading in the updated data and revising the forecasts Exit the program This concludes Lesson 1 38 The Basics Lesson 2 Using Forecast Modifiers In the very first lesson you prepared forecasts using expert
225. the United States data and save the project Next the planner for Canada would open the project review and adjust the Canadian data and save the revised project Next the planner for Mexico would open the project review and adjust the Mexican data and save the revised project At this point the demand planners forecasts are complete and the project is ready for the management review meeting 50 Collaborating With Colleagues Clearly there are some downsides to the above procedure One is that the demand planners cannot work on their country level forecasts simultaneously they have to wait until it is their turn to do so Another problem is that even though they are working on a single country the project contains data and forecasts for all three countries which makes it harder to manage and more prone to error An alternative is to use the super project approach This allows you to create a separate forecasting project for each country and then consolidate them into a new super project which includes all three countries Using this approach the three demand planners can work on their forecasts simultaneously using a project that only contains their country When all three are done the Project Manager is used create a super project containing the consolidated forecast Start Forecast Pro Unlimited select File gt Open and open the project Tutorial 4 USA 55 Forecast Pro Unlimited 64 bit Tutorial 4 USA NEN 000 05 664
226. the forecast button When we opened the forecast project Forecast Pro Unlimited restored the script forecasts overrides and Hot List that were present when the forecast project was saved The person restoring the forecast project does not even need to have access to the files containing the historical data that were used to generate the forecasts the only thing he or she needs 1s the forecast project files Notice that the person who created the forecasts entered some overrides in June July and August For convenience let s refer to the person who created this file as John Notice also that the background color for these cells is yellow This indicates that the cells contain comments Click on the June override cell to display the comment The comment informs us that John increased the forecast for the summer months by 20 in anticipation of a planned promotion Let s say that we feel that a 20 lift is overly optimistic for August the final month of the promotion and we want to lower it to 15 Set the target row box located to the immediate left of the Commit button which currently reads John to Override 2 Highlight the cell for August on the Statistical forecast row Set the percent box to 15 and click the Percent button Let s now add a comment Highlight the cell for the override you just made click the comment field and type John I lowered the promotional lift for summer madness to 15 and click the Commit button
227. the light blue Filter icon to activate the filtering and sorting mode Click on the filter dropdown for Ranking select Sort Smallest to Largest and click OK Your screen should now look like the one below Sorting and Filtering the Pareto Output 57 ES Forecast Pro Unlimited 64 bit Tutorial 5 A s E TG os GV ali File Settings Operations Project View Window Help 06065664 O64 0 4 6 OO 9S Total 2007 1 gt through 2012 gt 6 Holdout 0 3 Total Muffins 3 Stuff Mart COR 12 11 BRA 12 11 BLU 12 11 otal Muffins o in BLU 12 11 A APP 12 11 E ol uffins APP 12 11 A OAT 12 11 otal Muffins uff Ma COR 12 11 A Sids Club ol akes BU 20 02 A COR 12 11 otal akes uff Mart CH 20 01 A gt BRA 12 11 o uffins a BRA 12 11 A BLU 12 11 APP 12 11 3 Grocery Land COR 12 11 BLU 12 11 of luffins a OAT 12 11 A APP 12 11 akes Stuff Mart CA 20 01 A Food King Sids Club APP 12 11 A COR 12 11 BLU 12 11 E Tutorial 5 Graph ole ls APP 12 11 ee eS 3J Cakes 3 Stuff Mart VA 20 01 ST 20 02 COR 12 11 A BLU 12 11 A LF 20 02 A CH 20 01 A CO 20 01 A Total Total 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan E History MB Forecasts MM Forecast Interval Total Total The Pareto field displays the assigned code The of Total field displays the percentage of total volume that the item represents The Ranking field is self
228. time series that were collected using twelve 4 or 5 week periods per year The number of weeks per period is not consistent from year to year 4 4 5 Helper xls is a helper file and contains the helper variable _Weeks You import helper variables into your Forecast Pro Unlimited project using Project gt Import gt Helpers From Helper variables are either weighting variables or event variables They are identified by the use of a preceding or trailing underbar Other than the underbar the format is identical to the input data In this example the helper variable _Weeks contains the number of weeks in each period It covers the historical span as well as the forecast period Select Settings gt Options and make sure that the data mode is set to XIs and that the forecast horizon is set to 12 Create a script containing the single line 4 4 5 Data Read in the data using the red Read data icon Use Project gt Import gt Helpers From to import the helper file 4 4 5 Helper xls The file is located in the Forecast Pro Unlimited input folder and depending on your settings you may need to use the file type dropdown to load it in from Excel 90 Using Weighting Transformations Click the red Forecast icon to build the models When the calculations are complete make sure that the Graph and Forecast Report views are open the fitted values are included on the graph and view the results for Product 1 shown below Notice that a seasonal mode
229. ting system and installs the matching version Alternatively you can run either the 32 bit or 64 bit setup program directly The 64 bit installation uses an MSI file called ForecastProUnlimited msi1 which is located in the directory d x64 en us You must run the MSI as an administrator The 32 bit installation uses an InstallShield installation program called Setup exe which is located in the directory d Win32 You must run the Setup program as an administrator 10 Installing Forecast Pro Unlimited Chapter 3 A Quick Overview of Forecasting What is Statistical Forecasting Everybody forecasts whether they know it or not Businesses have to forecast future events in order to plan production schedule their work force or prepare even the simplest business plan Most business forecasting is still judgmental and intuitive Sometimes this is appropriate People must integrate information from a large variety of sources qualitative and quantitative and this is probably best done by using the extraordinary pattern recognition capabilities of the human brain Unfortunately many companies also use judgmental forecasting where they should not Not everyone understands the concept of forecasting It tends to get mixed up with goal setting If a company asks its salespeople to forecast sales for their territories these forecasts often become the yardsticks by which they are judged The main advantage of statistical foreca
230. ting their component forecasts For example the forecast for the group Camera would be made by summing the forecasts of vVCamera and iCamera 74 Building Multiple Level Models An alternative is to use top down reconciliation Select Total gt Camera on the Navigator and right click to display the Navigator s context menu Select Top down Notice that the YTOPDOWN modifier now appears next to Camera SE Forecast Pro Unlimited 64 bit Projecto8 i oN E N ei File Settings Operations Project View Window Help 00055166 4018S 0 0 0086 gt through 2012 lt gt Holdout 0 Camera Product Category Ad ASA100_BW ASA100_Color eae ee ee Oe Se ee Se ee Oe ee Ee Oe 2010 Jan an 2012 Jan HB Forecasts MMB Forecast Interval 5 Project08 Forecast Report oo s amp s Forecast Report for Camera Product Category Total gt Camera Expert Analysis Using rule based logic have narrowed down the choice to exponential smoothing or Box Jenkins wil perform an out of sample test to select between these two approaches The cumulative MAD for Exponential smoothing was 4 633 and for Box Jenkins was 4 548 The rolling out of sample test used a maximum horizon of 12 and generated 78 forecasts for each method Based on the lower MAD wil use Box Jenkins The TOPDOWN group modifier instructs the program to adjust lower level forecasts to sum up to the indicated level Let s illustrate ho
231. to display its graph If you expand Jotal gt Muffins on the Navigator you Il discover a customer level breakdown and finally a SKU level Experiment with the Navigator until you are comfortable with its operation In the next lesson we ll show you some shortcuts for navigating through complex hierarchies After you have explored the data arrange your display so that it matches the one shown below 24 The Basics Forecast Pro Unlimited 64 bit Project03 INI a N h Ek SEs Ss CEs File Settings Operations Project View Window Help 0000008080002 0098 COR 12 11 200 through 2012 E Holdout 0 3 Total Muffins Stuff Mart COR 12 11 CASE 12 count Corn Muffins gt COR 12 11 BRA 12 11 BLU 12 11 APP 12 11 OAT 12 11 4 Sids Club 4 Grocery Land H Food King e Cakes Project03 Forecast Report Forecast Report for COR 12 11 CASE 12 count Corn Muffins Total gt Muffins gt Stuff Mart gt COR 12 11 Raw hierarchy is Total gt Muffins gt Stuff Mart gt COR 12 11 A re forecast is pending for COR 12 11 COR 12 11 CASE 12 count Corn Muffins You probably noticed that after the data had been read in the dialog bar was updated to include the time span of the data and the holdout sample The dialog bar displays the earliest and latest period found for the entire script The ending date is very important If an individual item has data on the ending date
232. ts and 16 out of 17 academic teams The rather simple comparison methodology for the original M Competition was as follows The researchers assembled a collection of 1001 time series of yearly quarterly and monthly data The data were obtained from microeconomic industry level macroeconomic and demographic sources Twenty forecasting methods were tested for the entire sample of 1001 time series and three on a subset of only 111 time series A sample of time points 6 for annual series 8 for quarterly 18 for monthly was held out from the end of each time series Each forecast model was fitted to the remaining data and used to forecast the values of the holdout sample The forecasts were then compared to the withheld data and errors computed for each horizon each time series and each forecast method The errors were then summarized and analyzed in a variety of ways 101 The most significant weakness in this methodology is that it uses only one forecast base for each time series the last point in the fitting sample One obtains only a snapshot of performance from one point in time A forecast base just before or after a dramatic event in the data may completely change the results Furthermore you obtain only one forecast error for each horizon time from 1 to the end of the fit set This procedure is referred to as a static evaluation Forecast Pro Unlimited implements both a static and a rolling base evaluation The rolling
233. umbling block on the way to success in forecasting their own data This usually happens when a user misunderstands some of the details of the data format This chapter explains the data formats supported by Forecast Pro Unlimited advises you how to select a format and describes how to create the files If you read the material carefully and examine the sample data files that are shipped with Forecast Pro Unlimited you will be up and running quickly The first two sections describe data requirements and the different data file formats After you have selected your file format consult the appropriate section for instructions on how to create the files Overview Forecast Pro Unlimited works with historic time series 1 e sequences of values of a variable at some time interval Business series are usually expressed in terms of the calendar and can be daily weekly monthly or quarterly Forecast Pro Unlimited can work with any type of time series but is oriented towards weekly monthly and quarterly calendar data 113 Collection and maintenance of reliable historic data is up to you and your IT department and can be implemented in many different ways depending on information flow conditions in your organization Data length Forecast Pro Unlimited works by fitting a statistical model to your historic data and extrapolating it via the fitted model Thus your data must be long enough to provide reasonably stable estimates of the most
234. unlocked items only Let s now modify the above hierarchy by overriding the forecast for Item A2 to equal 75 This results in the hierarchy shown in Figure 6 below Total S 5 O 500 F 500 GroupA GroupB S 2 S 3 F 150 F 350 ItemA1 ItemA2 ItemB1 ItemB2 Seu S 1 S 1 S 2 O 75 O 75 F 116 667 F 233 333 F 75 EF 75 Figure 6 Notice that normally the allocation of the 500 between GroupA and Group B would be based on the statistical forecast and result in forecasts of 200 and 300 respectively However we cannot change the GroupA forecast to 200 because it is locked at 150 due to the overrides on ItemA1 and ItemA2 Therefore the forecast for GroupB becomes 350 Examples Where Overrides Cannot be Fully Allocated If you make forecast overrides to more than one level of the hierarchy you can generate situations where the overrides cannot be allocated In these instances an error message will be displayed and the override will not be applied Figure 7 below depicts a forecast hierarchy where ItemA1 and ItemA2 have both been overridden to equal 75 and ItemB1 has been overridden to equal 150 Examples Where Overrides Cannot be Fully Allocated 207 Total F 302 GroupA GroupB S 2 S 3 F 150 F 152 ItemA1 ItemA2 ItemB 1 ItemB2 S 1 S 1 S 1 S 2 O 75 O 75 O 150 F 2 F 75 F 75 F 150 Figure 7 Suppose you try to override the forecast for GroupA to equal 100 The override could not be applied because both ItemA1 and
235. uppose that Product 0 will not come on line until October 2012 We d therefore like the forecast to be zero until September 2012 and 500 units per month thereafter To accomplish this we must first remove the Fixed Forecast Value setting Right click Product 0 on the Navigator to invoke the context menu and then select Remove Modifier s This will restore the default forecast of zero Right click Product O on the Navigator to invoke the context menu and then select Model gt Very Simple Models gt Fixed Value After Forecast Fixed Value arer M om Enter 500 as the Set forecasts to value and set the after date to September 2012 Click OK and verify the forecast is now zero until September 2012 and 500 thereafter Exit Forecast Pro Unlimited Forecasting by Analogy In this exercise we ll create forecasts for a new product using a technique known as forecasting by analogy This approach is sometimes also referred to as looks like analysis The concept is a very simple one You are launching a new product and you expect the initial sales pattern to be similar to an analogous product s initial sales pattern or to a launch profile that you ve created To use this method you must supply the launch profile or analog series in the form of a helper variable Helper variables names must start or end with an underbar Helper Forecasting by Analogy 83 variables are used in conjunction with event models by analogy
236. using Forecast Pro Unlimited Forecaster or Collaborator licenses to review make changes etc If there is a third individual who needs to review the project that person would do so after the second individual has updated the project Alternatively the super project approach allows you to break large forecasting jobs into smaller pieces that can be worked on separately and then consolidated To implement this approach you first create forecast and save separate component projects and then use the Project Manager to combine the component projects into a new super project allowing you to view and manipulate the consolidated forecast 198 Command Reference Pros and cons To illustrate the pros and cons of each approach let s consider the following example A company sells their products in three countries the United States Canada and Mexico They employ three different demand planners each of whom is responsible for forecasting a specific country After the demand planners have completed their forecasts they meet with management to review the forecasts and make any required adjustments Accomplishing this using a single stand alone project would require a sequential review process For example assume the demand planner for the United States goes first He or she would create a forecast project which includes all three countries and then review and make adjustments to the United States data and save the project Next the planner for
237. utliers Ovemides Command Line Pareto Analysis Advanced Controls The Basic tab contains frequently accessed settings that every user should understand Input Data Specify the complete path name of the directory where the program should read data Projects Specify the complete path name of the directory where the program should write the project files Output Specify the complete path name of the directory where the program should write all output files e g Numeric Output files forecast reports etc Data mode Select the type of data file that you will be using from the list of supported types Allow negative forecasts Most business data are inherently positive although there are exceptions like telephone connection gain or sales data that include returns as negatives Users with positive data are understandably disturbed when their forecasts turn negative This can occur when Forecast Pro Unlimited captures a downward trend at the end of your historic data If Allow negative forecasts is turned off Forecast Pro Unlimited will clip forecasts to zero that would otherwise be negative If Allow negative forecasts 1s turned on then Forecast Pro Unlimited takes no special actions to avoid negative forecasts Forecast horizon Specify how many periods ahead you want Forecast Pro Unlimited to forecast Upper confidence limit Specify the percentile for the upper confidence limits The upper confidence limit for a s
238. ve Fitting Models gt Curve Fit gt Automatic CFIT Use the curve fitting routine that minimizes the BIC over the historic data Models gt Curve Fit gt Straight Line CFIT LINE Fit a straight line to the data set Models gt Curve Fit gt Quadratic CFIT QUAD Fit a quadratic curve to the data set Models gt Curve Fit gt Exponential CF T EXPO Fit an exponential curve to the data set Models gt Curve Fit gt Growth Curve CFIT GROW Fit a growth curve to the data set Model Specification Modifiers 153 Bass Diffusion do en oe Generate coefficients automatically Coefficient of Innovation p 01 Coefficient of Imitation q 4 Initial Total rm 100000 Cancel Help Model gt Bass Diffusion BASS Use the Bass diffusion model with automatically generated coefficients Model gt Bass Diffusion BASS p g m Use the Bass diffusion model with user defined coefficients p q and m By Analogy COES Select the analog variable Estimated launch total NA Profile 2 Specified launch total 500000 gt Launch horizon 12 periods V Launch date 2011 7 Model gt By Analogy ANALOG X Use the by analogy model with automatic calculation of the launch total _X is the name of the time series containing the analogy series Model gt By Analogy ANALOG X A B Use the by analogy model with a specified launch total of A and a specified launch horizon of B Model gt By Analogy ANALOG X A B C D Us
239. w this works by considering the various steps involved in forecasting our current example Step One Prepare forecasts at all levels 1 e prepare forecasts for Total Camera Film vCamera 1Camera vFormat_Film 1Camera_Film ASA100_BW and ASA100_Color based on their past history Step Two Since the group Camera is being forecasted top down the forecasts of vCamera and iCamera are adjusted proportionally so that they sum to the Camera forecast Step Three Since the group Film is being forecasted bottom up the default the Film forecast is replaced with the sum of the forecasts for vFormat_Film iCamera_Film ASAIOO_BW and ASA100_ Color Step Four Since the group Total is being forecasted bottom up the default the Total forecast is replaced with the sum of the forecasts for Film Camera Bottom up and Top down Forecasting 75 There is one other group modifier INDEXES instructs the program to estimate the seasonal indexes at the group level and use them for all members in the group This is particularly useful when some members of the group have short histories or small demand and seasonal factors are thus difficult to calculate Defining Groups Using Attribute Fields X il gt Presto Camera Company Compatibility Mode Microsoft Excel Sol Hor Insert age D Add Ins AbleBits com 9 o P ss AM33 f v A B G D E FGH J K L M N O P ae 1 Total Product Category Product Description Jan 08 F
240. window will include a Disaggregate to drop down box allowing you to disaggregate 1 e push down any overrides made at a group level to a lower level of the hierarchy The disaggregation 1s based on a proportional allocation Menu Items and Dialog Boxes 187 Options x Basic Formats Outliers Overides Command Line Pareto Analysis Advanced Controls Project Components to Apply V Modifiers 7 Settings V Overides Forecast Pro Unlimited supports command line operation allowing you to create forecasts in a hands off mode For a complete description of how to run the product from the command line consult the Operating From the Command Line lesson in the tutorial and the Command line Operation section of this chapter The Command Line tab allows you to dictate the options to apply if the current project 1s run via the command line The first three options control how the forecasts are generated when the project is run from the command line Modifiers If this option is selected the project s forecast modifiers if any are present will be used to generate the forecasts in command line mode If this option is not selected all forecast modifiers in the project will be ignored when running from the command line Overrides If this option is selected the command line run will begin by reading in the data generating the statistical forecasts and then it will apply any matching overrides comments in the
241. you may want to take with your own business data Trading day corrections Many businesses are sensitive to the number of working days per period Consider a service provider who is closed on the weekends The number of working days in January and all other months will vary from year to year depending on how many weekend days happen to fall in any given month If the number of working days has an impact on sales then it needs to be accounted for in the model A simple solution would be to use a weighting transformation where the weights consist of the number of working days per month User defined seasonality At times you may wish to supply your own estimate of the seasonal pattern rather than trying to extract it directly from the data This might be desirable if the data were short or very noisy The weighting variable would consist of seasonal multipliers for the series Since the seasonality is being handled by the weighting variable you may want to restrict the model selection to nonseasonal models perhaps using a custom exponential smoothing model New product forecasting The weighting transformation can be used to force a new product s forecast to mimic a certain shape The weighting variable would consist of the desired shape e g the history of a similar product Since the shape of the forecast is being handled by the weighting variable you 92 Using Weighting Transformations may want to restrict the model selection to nontre
242. you through a sample forecasting session using automatic model selection Lesson 2 teaches you how to use forecast modifiers to dictate model selection Lesson 3 teaches you how to update your forecast project as new data become available Lesson 4 teaches you how to collaborate with colleagues to establish the final forecast Lesson 5 teaches you how to use Pareto analysis to assign ABC classifications to your forecast items and how to sort and filter reports Lesson 6 teaches you how to build event models to capture promotional effects Lesson 7 teaches you how to set up and forecast a multiple level script Lesson amp teaches you how to forecast new products prior to historic data being available and also teaches you how to use the forecast by analogy and Bass models Lesson 9 teaches you how to use weights to adjust for trading day impacts or to forecast new products based on similar products 4 Before You Begin Lesson 10 teaches you how to use Forecast Pro Unlimited s outlier detection and correction functionality Lesson I teaches you how to assess forecasting performance using a holdout sample approach Lesson 12 teaches you how to operate the program from the command line All of the lessons use sample data provided with the software Part 3 Reference Chapter I explains how to select the appropriate data format and how to set up your database Chapter 2 describes the various reports and output files that can

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