Use Demand Class in Forecasting

Accurate demand forecasting is vital for holding optimal inventory. The better
you forecast your demand, the less residual inventory you will hold. Forecasting
your demands is the key to plan your capacity, inventory & pricing. No forecast
ing method is 100% correct. Multiple forecast methods are used - based on judgem
ent & based on data. I don't intend to write a long one on forecasting in this n
ote; rather focus on "demand class" concept used in forecasting in Oracle Planni
ng suite.

Business might have requirements to forecast its demand in multiple dimensions t

o help analyze the trend in actual sales order demands that consume the forecast
s. As business, you would want to forecast your demand for certain regions and a
nalyze how your actual sales demands were. While analyzing the regional forecast
s consumption, you also might want to forecast on the customer segment you recei
ve orders from - like automotive, energy, pharma or FMCG based on your product.

Attach the demand class to the forecasts you define and mark the sales order dem
ands with relevant demand class. In the above example, you can opt to attach a "
region" demand class to order types defined for each region. You can use the dem
and class ATP functionality to check the availability for certain demand class.
Demand class can be optionally attached to your Inventory organization definitio
n. If demand class is not attached to the forecast, Planning engine takes the de
mand class from the organization to which the demand belongs.

Remember the thumb rule, consumption takes place only if the demand class of the
sales order and forecast match.

Questions? Drop me a note on applearn@gmail.com