Forecast-Based Planning MRP

Like reorder point planning, forecast-based planning operates using historical values and forecast values as future requirements are determined via the integrated forecasting program. However, in contrast to reorder point planning, these values then form the basis of the planning run in forecast-based planning.

The forecast, which calculates future requirements using historical data, is carried out at regular intervals. This offers the advantage that requirements, which are automatically determined, are continually adapted to suit current consumption needs. If, during the current period, material has already been withdrawn from stock, then the forecast requirement is reduced by the quantity of material that was withdrawn. This means that the quantity of the forecast requirement that has already been used is not included in the planning run again.

You can specify the period split for the forecast (daily, weekly, monthly or per accounting period) and the number of periods to be included in the forecast individually for each material. It is possible, however, that the forecast period split is not specific enough for planning purposes. Therefore, for each material, you can determine that the MRP forecast requirement values should be divided according to a finer period split. You can also determine how many forecast periods are to be taken into account during requirements planning.

For a monthly forecast, the requirements date would be set on the first workday of the month because, for planning, it is assumed that the total requirement must be available at the beginning of the period. You can then divide this monthly requirement into either daily or weekly requirements.

The requirements quantities forecast by the system are used in the planning run to carry out the net requirements calculation. During this calculation, every period is checked to make sure that the forecast requirements are covered either by available warehouse stock, by planned receipts from purchasing or by production. If the requirements forecast by the system are not met by these above mentioned possibilities, then an order proposal is generated.

The quantity stated in the order proposal is calculated by the system according to the lot-sizing procedure that you selected. Depending on the lot-sizing procedure, several requirement quantities are grouped together into one lot (see Lot-Sizing Procedures: Overview).

For each order proposal, the system calculates the date that it must be converted into either a purchase order or a production order so that the purchase order can be sent to the vendor on time or the production order can be transferred to production on time. Naturally, the vendor can only deliver the ordered quantity punctually if he receives the purchase order on time. The same applies to production - the ordered quantity can only be produced according to schedule if the production order is received on time.