Determine Calculation Method
• After identifying the template by a unique ID, and selecting the type and years for the forecast and the history, determine what type of calculation to use
• Standard calculation methods are available
• The user can design custom calculation methods (written in Progress 4GL).
Calculation Method
Decide which calculation method best suits the needs of your products
• Some typical considerations for selecting a calculation method include determining the sales history patterns of demand
• Four typical patterns are:
• Trend – a steady growth of demand
• Seasonal – cyclical patterns of greater and lesser demand that usually repeat each year
• Horizontal – a steady demand for product that has little deviation
• Cyclical – greater and lesser demand that usually cycles over several years that are not easily predicted
Sales History Patterns
Pattern | Description | Example |
Trend | Sales quantities generally increase over time. | The growth pattern of a new product |
Seasonal | Sales quantities fluctuate according to some seasonal factor such as weather or the way in which a firm has chosen to handle its operations. | Sales of soft drinks, which increase in the warm weather months |
Horizontal | Sales quantities do not increase or decrease substantially. | A stable product with consistent demand |
Cyclical | This pattern is similar to seasonal, but the length is greater than one year. The pattern does not repeat at constant intervals and is the hardest to predict. | The sale of houses |
