An Oracle White Paper

September 2018

Oracle Supply Chain Planning-Forecast

Processing

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Contents
Summary ............................................................................................................................................. 3
Forecasts as Input to Supply Plans ................................................................................................. 4
Forecast Spreading ............................................................................................................................ 5
Consumption of Forecasts ................................................................................................................ 9
Consumption of Forecasts within Demand Time Fence ............................................................ 16
Consuming Forecasts with No Demand Class ............................................................................ 20
Consumption of Forecasts by Shipped Sales Orders................................................................. 23
Past Due Forecasts ......................................................................................................................... 24
Forecasting Demands for ATO Models ........................................................................................ 25
Forecast Explosion by Supply Planning ....................................................................................... 25
Forecast Explosion by Demand Management ............................................................................. 27
Consumption Order of Forecasts with Multiple Ship-to Consumption Levels ......................... 33
Forecast Consumption for Drop Shipped Items .......................................................................... 34
Forecasts Consumption of Drop Shipped ATO Model with Supplier Modeled as a Contract
Manufacturing Organization............................................................................................................ 35
Summary ........................................................................................................................................... 36

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Summary

Supply Planning uses forecast processing to process forecasts before planning supplies to
satisfy them. Forecasts can be input either from Oracle Demand Management or from external
systems. The following sequence of steps broadly describes forecast processing in Supply
Planning.

Start

No Is Spreading
Enabled?

Yes

Spread Forecasts

Consume within No
Demand Time Fence?

Yes

Consume Apply Demand

Forecasts Time Fences

Apply Demand Consume

Time Fences Forecasts

Plan Supplies for

Forecasts

End

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Forecasts as Input to Supply Plans

Forecasts can either be Demand Schedules created in Demand Management or external

forecasts uploaded as CSV files.
Forecasts created in Demand Management can be one of a) Approved Final Shipments
Forecasts b) Approved Final Booking Forecasts c) Final Bookings Forecasts or d) Final
Shipments Forecasts.

You can specify the Ship to Consumption levels for these forecasts. The possible values are a)
Item b) Demand Class c) Customer and d) Customer Site

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Consumption at the item level occurs when item names match between the forecast and the
sales order.
Consumption at the customer level occurs when item names and customer match between the
forecast and the sales order.
Consumption at the customer site level occurs when item names, customer and customer site
match between the forecast and the sales order.
Consumption at the demand class level occurs when item names and demand class match
between the forecast and the sales order.
External Forecasts are uploaded via CSV files. The only valid Ship to Consumption level for
external forecasts is Item.

Forecast Spreading

Forecast spreading takes place when Supply Planning evenly distributes weekly and period
input forecasts into their constituent daily buckets. You can enable spreading by selecting
“Spread Forecast Evenly” as the Forecast Spreading option in Plan Options.

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You can also have Supply Planning use one of the following three calendars to spread
forecasts:
1. The organization’s manufacturing calendar
2. The organizations’ shipping calendar
3. A user-defined calendar

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Examples: Spread Forecast Evenly
The plan has weekly forecasts with Forecast Spreading set to “Spread Forecast Evenly”. The
manufacturing calendar used has five working days and two non-working days. The non-work
days are not shown below. For example, day 8 immediately follows day 5 since days 6 and 7
are non-work days.
The Plan Start is Day 3.
The Gross Forecast measure displays the weekly forecasts bucketed on the first day of the
week. The Net Forecasts measure displayed the weekly forecasts spread over the daily
buckets.
The forecasts on Day 1 and D2 are past due. They are bucketed on the plan start date, which is
day 3.

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 Week 1 2 3

Weekly
Forecast 50 60 70
(input)
Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19
Gross
50 60 70
Forecast

Net
30 10 10 12 12 12 12 12 14 14 14 14 14
Forecast

Note: The row “Weekly Forecast (input)” is not a measure displayed in the plan output. We
show it here to illustrate how the weekly forecasts are bucketed as Gross Forecasts and spread
as Net Forecasts.

Example: Do Not Spread Forecast

The plan has weekly forecasts with Forecast Spreading set to “Do not spread forecast”.. The
manufacturing calendar used has five working days and two non-working days.
The Plan Start Date is Day 3. The forecasts are “bucketed” with their suggested due dates at
the start of the week except in Week 1, where the forecasts are bucketed on Day 3, the plan
start date.

Week 1 2 3

Weekly
Forecast 50 60 70
(input)
Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19
Gross
50 60 70
Forecast

Net
50 60 70
Forecast

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Consumption of Forecasts

Supply Planning will consume forecasts with sales orders. This consumption of forecasts takes
place based on specific settings in the plan options. You can use the following consumption
specific plan options to define the parameters within which Supply Planning performs forecast
consumption.
The General sub-tab in the Supply tab has the following consumption related parameters
1. Consume by forecast bucket
2. Backward Days
3. Forward Days
When you check “Consume by forecast bucket” Supply Planning will restrict consumption to
within the forecast bucket in which both the sales orders and forecasts are present. A forecast
can be consumed only by sales orders in the same forecast bucket.
When you leave “Consume by forecast bucket” unchecked, Supply Planning will look to
consume forecasts across daily buckets based on the specified Backward Days and Forward
Days.
Note: The Backward Days and Forward Days are calendar days. This means that they include
non-working days as well.
Note: When you check ““Consume by forecast bucket” and also enters Backward Days or
Forward Days or both, Supply Planning will ignore the Backward Days or Forward Days or both
if both are entered.
Consumption Order of Forecasts:
When you define backward and Forward Days, the following is the order of consumption.
The Sales Order consumes the forecasts in its daily bucket
If there are forecasts that can still be consumed the forecasts in the backward window are then
consumed starting with the forecasts that are closest to the daily bucket of the sales order
If there are forecasts that can still be consumed the forecasts in the forward window are then
consumed starting with the forecasts that are closest to the daily bucket of the sales order

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Example: Spreading Enabled and “Consume by forecast bucket “Checked
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecast evenly
Consume by forecast bucket: Yes.
The Plan Dart Date is Day 1.
Since “Consume by forecast bucket” is checked, the Sales Order cannot consume the weekly
forecasts in Weeks 1 and 3. The Sales Order consumes the weekly forecast in Week 2.

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 Week 1 2 3

Weekly
Forecast
(input) 50 60 70

Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
Forecast 50 60 70

Spread
Forecast 10 10 10 10 10 12 12 12 12 12 14 14 14 14 14

Sales
Order 100

Consumed
Forecast 12 12 12 12 12

Net
Forecast 10 10 10 10 10 14 14 14 14 14

Note: Spread Forecast and Consumed Forecast are not actual measures. The rows are shown
to make the example clear.
Example: Spreading Enabled and "Consume by forecast by bucket" Not Checked
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecast evenly
Consume by forecast bucket: No
Backward Days=9
Forward Days=9
The Plan Dart Date is Day 1
Since “Consume by forecast bucket” is not checked, the sales order will look to consume sales
forecasts not necessarily in bucket 2 but within its backward and forward consumption window.
The Sales Order will first consume the forecast on Day 10, the due date of the sales order. It will
then consume the forecasts in the backward window. The backward window as derived from the
user-specified Backward Days of nine extends from Day 9 to Day 1. The sales order consumes
forecasts from Day 9 to Day 1, in that order.

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The total consumed quantity at the end of the consumption in the backward window is 12*3+
10*5=86.
Since the sales order quantity is 150, a quantity of 64 (150-86) is still left to be consumed. The
sales order now looks to consume forecasts in the forward window. The forward window as
derived from the user-specified Forward Days of nine extends from Day 11 to Day 19.
The sales order now looks to consume forecasts from Day 11 to Day 19, in that order. It
consumes the remaining unconsumed quantity of 64 by Day 17 (12*2+14*2+12).
The unconsumed forecasts at the end of the consumption process are on Days 17, 18 and 19.
They are the Net Forecasts as shown below.

Week 1 2 3

Weekly
Forecast 50 60 70
(input)

Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
50 60 70
Forecast

Spread
10 10 10 10 10 12 12 12 12 12 14 14 14 14 14
Forecast

Sales
150
Order

Consumed
10 10 10 10 10 12 12 12 12 12 14 14 12
Forecast

Net
2 14 14
Forecast

Example: Forecasts not spread and “Consume by forecast bucket “Not Checked
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Do not spread forecasts
Consume by forecast bucket: No
Backward Days=5
Forward Days=5
The Plan Dart Date is Day 1

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Supply Planning does not spread the weekly forecasts and buckets the weekly forecasts on the
first day of the weekly buckets.
Since “Consume by forecast bucket” is not checked, the sales order will look to consume
forecasts not necessarily in bucket 2 but within its backward and forward consumption window.
The sales order cannot consume the forecast in Week 1 since it is outside the backward window
of 5 days. It consumes the forecast in Week 3 since it is within the forward window of 5 days.

Week 1 2 3

Weekly
Forecast 50 60 70
(input)

Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
50 60 70
Forecast

Sales
100
Order

Consumed
60 40
Forecast

Net
50 30
Forecast

Prefer Consumption within Bucket

You can prefer to have Supply Planning perform forecast consumption within the bucket in
which the sales order has its suggested due date. You can accomplish this by checking the
“Prefer consumption within forecast bucket” on the Advanced Options tab. Supply Planning will
then apply Backward Days and Forward Days only if there are forecasts left to be consumed
after consuming all the forecasts within the bucket.
In order for the "Prefer consumption within forecast bucket" option to take effect, you need to set
the following two plan options:
a. “Consume by forecast bucket” needs to be unchecked
b. Forecast Spreading needs to be set to “Spread Forecasts Evenly”

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Example:
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecasts evenly
Consume by forecast bucket: No
Backward Days=5
Forward Days=5
Prefer consumption within forecast bucket: Yes
The Plan Start Date is Day 1.
Supply Planning performs forecast processing in the following sequence
Supply Planning spreads weekly forecasts of weeks 1 through 3. This means that we will have
spread forecasts of 10 each from days 1 through 5, 12 each from days 8 through 12 and 14
each from days 15 through 19.
The Sales Order of 100 first consumes all the forecast (60) within the weekly bucket since the
user has checked Prefer consumption within forecast bucket”.
Since the sales order can consume 40 more, Supply Planning then applies the Backward
Window of 5 days and looks to consume forecasts between day 5 and day 10. Supply Planning
then consumes the spread forecast of 10 on day 5.

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Supply Planning then applies the forward window of 5 days and looks to consume forecasts
between day 10 and day 15. Supply Planning then consumes the spread forecast of 14 on day
15 in the forward window.
A quantity of 12 remains unconsumed at the end of the consumption process. As in the prior
examples, note that “Spread Forecast”, “Consumed Forecast” and “Overconsumed Forecast”
are displayed in the table below for purposes of describing this example and are not measures
available for display in the Measures catalog in Supply Planning.
The Net Forecast on the plan output measure will have the values as shown below.

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Week 1 2 3

Weekly
Forecast 50 60 70
(input)

Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
50 60 70
Forecast

Spread
10 10 10 10 10 12 12 12 12 12 14 14 14 14 14
Forecast

Sales Order 100

Consumed
10 12 12 12 12 12 14
Forecast

Overconsumed
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Forecast

Net Forecast 10 10 10 10 14 14 14 14

Consumption of Forecasts within Demand Time Fence

Demand Time Fence Control

You can have Supply Planning enforce demand time fences. This is when you do not want
Supply Planning to consider forecasts for a certain number of days from the plan start date. This
is to ensure that Supply Planning considers only sales orders during this period.

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All forecasts within the demand time fence are dropped when the Demand Time Fence Control
check box is checked in plan options.
The Demand Time Fence Date is calculated as the plan start date + Demand Time Fence
Days+1.
Supply Planning consumes forecasts within time fence when the checkbox “Consume forecasts
inside demand time fence” is checked. Supply Planning then drops any unconsumed forecasts
within the demand time fence.

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Example: Consume Forecasts within Demand Time Fence Checked
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Do not spread forecasts
Consume by forecast bucket: Yes
Demand Time Fence= 9 days
Consume forecasts inside demand time fence: Yes
The Plan Start Date is Day 1.
Supply Planning performs forecast processing in the following sequence
The Demand Time Fence (DTF) is on Day 9. Since “Consume by forecast bucket” is checked
and “Consume forecasts inside demand time fence” is set to Yes, the sales order on Day 5 will
consume the forecast in week 1. Week 1 is within the demand time fence, which is on Day 9.
With no more forecasts left to be consumed Supply Planning will now drop any unconsumed
forecasts within the DTF. The unconsumed forecast on day 1 of quantity 10 will be dropped.
The forecast of 60 on day 8 will not be dropped even though day 8 is within the DTF. This is
because this forecast is a weekly forecast in Week 2 and Week 2 ends on Day 12, which is
outside the DTF.

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Week 1 2 3

Weekly
Forecast 50 60 70
(input)

Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
50 60 70
Forecast

Sales
40
Order

Consumed
40
Forecasts

Forecasts
Dropped 10
within DTF

Net
60 70
Forecast

Example: Consume Forecasts within Demand Time Fence Unchecked

A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecasts evenly
Consume by forecast bucket: No
Backward Days=7
Forward Days=7
Prefer consumption within forecast bucket: No
Demand Time Fence=5 days
Consume forecasts inside demand time fence: No
The Plan Start Date is Day 1.
Supply Planning performs forecast processing in the following sequence
Since Consume by forecast bucket and Prefer consumption within forecast bucket are not
enabled, Supply Planning will apply the backward window of 7 days after consuming the
forecast on day 10. The backward window extends from Day 3 to Day 9.

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The Demand Time Fence (DTF) is on Day 5. Since Consume forecasts inside demand time
fence is set to No, the sales order will NOT consume the forecasts on Day 3, Day 4 and Day 5
as they are within the DTF.
Supply Planning will then apply the forward window of seven days from Day 11 to Day 17

Week 1 2 3

Weekly
Forecast 50 60 70
(input)
Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19

Gross
50 60 70
Forecast

Spread
10 10 10 10 10 12 12 12 12 12 14 14 14 14 14
Forecast

Sales
100
Order

Consumed
12 12 12 12 12 14 14 12
Forecasts

Forecasts
Dropped 10 10 10 10 10
within DTF

Net
2 14 14
Forecast

Consuming Forecasts with No Demand Class

It is possible for have forecasts without reference to demand class (null values). Such forecasts
can be part of Demand Schedules whose Ship-to Consumption level is Demand Class. You can
control the consumption order of such forecasts with the plan option “Consume Forecast with
No Demand Class”. The option has two values, “Within each bucket” and “After consuming
demand specific forecast”.

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If the value specified is “Within each bucket”, the process starts by consuming forecast entries
on the schedule date of the sales order. It consumes entries with matching demand class first
followed by those with no Demand Class (Null). It then consumes forecast entries within the
backward and forward consumption days; for each day and in the same sequence (matching
Demand Class followed by no Demand Class).
If the value specified is “After consuming demand specific forecast”, the process starts with
sales orders consuming forecasts with matching demand class on the same day. Forecasts with
matching Demand Class in the backward window are then consumed followed by those in the
forward window. If sales order quantities that have not been used in the consumption process
still remain they are used to consume forecasts with no demand class (null) in the same way.
Note: When you check “Consume by Forecast bucket” Supply Planning will apply the “Consume
Forecast with no Demand Class” setting to within the forecast bucket in which the sales order is
present.
Example: Consumption of forecasts with no demand class within each bucket
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecasts evenly
Consume by forecast bucket: No
Backward Days=9

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Forward Days=9
Prefer consumption within forecast bucket: No
Ship to consumption level: Demand Class
Consume forecast with no demand class: Within each bucket
The Plan Start Date is Day 1.
We start with Day 10 where the sales order consumes the forecast with matching demand
class. The sales order then consumes the forecast with null demand class on Day 10. This is
repeated in the backward window (Day 9 to Day 1) and then in the forward window (Day 11 to
Day 17).
We stop consuming on Day 17 since the total consumed quantity by Day 17 equals the quantity
of the sales order.
Note: The blue arrows show the direction of consumption in a bucket. Within a bucket, the sales
order consumes the forecast with a matching demand class first before consuming a forecast
with demand class as null. The numbers in the arrows indicate the sequence of consumption,
starting with the sales order consuming the forecast with matching demand class first and the
forecast with null demand class second on day 10. This continues into the backward window
followed by the forward window.

Example: Consumption of forecasts with no demand class after consumption of all

demand specific forecast
A Supply Plan has input weekly forecasts as shown below. The plan options are:
Forecast Spreading: Spread forecasts evenly
Consume by forecast bucket: No
Backward Days=9

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Forward Days=9
The Plan Start Date is Day 1.
Prefer consumption within forecast bucket: No
Ship to consumption level: Demand Class
Consume forecast with no demand class: After consuming demand specific forecast
The sales order consumes the forecast with matching demand class on Day 10. The sales order
then consumes forecasts with matching demand class in the backward window followed by the
forward window.
The total consumed quantity at this stage is 180. Twenty more can be consumed. The sales
order now consumes the forecast with null demand class on day 10. This is followed by the
consumption of forecasts in the backward window. The total consumed quantity is 200 by the
time the forecast with null demand class on Day 5 is consumed.

Consumption of Forecasts by Shipped Sales Orders

Partially or completely shipped Sales Orders can be part of forecast buckets if the buckets are
weekly or period buckets. Consider the case where the first forecast bucket is a period and the
plan start is in the middle of this period. A sales order shipped at the start of the period is still
part of the period and can consume the forecasts in the bucket.
Supply Planning will consider shipped sales not earlier than forty days before the start date. The
order quantity on shipped sales orders will be considered as zero during the supply planning
process and no supplies will be generated to satisfy these orders.

The shipped quantity will be available as a measure in Supply Planning. The measure "Shipped
Sales Orders" will display a quantity that will be equal to the shipped quantity and for the
Organization, Item, Time, Customer and Demand Class dimensions

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Example:
The plan is run on Day 8 but the forecast bucket is a period. The sales order was shipped on
Day 1, which is in the past. The sales order will still consume the forecast as shown below. The
other sales order to consume the forecast is the sales order on Day 1. The Net Forecast on Day
1 is therefore 100. The plan option “Consume by forecast bucket” is checked.

Forecast
1
Period
Past Plan Horizon
Day 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19
Gross
300
Forecast
Sales
Order 100
(Shipped)
Sales
100
Order
Consumed
200
Forecast
Net
100
Forecast

Past Due Forecasts

Forecasts in the past with respect to the plan start dates are considered in the plan based on
the parameter past due forecast days. If forecast bucket is daily, daily forecasts X number of
days prior to the plan start date are planned where X = Past due forecast days. If forecast
bucket is weekly, those past due weekly forecasts whose forecast bucket end date is greater
than (plan start date - past due forecast days) value are planned.
If forecast bucket is monthly or period, those past due weekly / monthly forecasts whose
forecast bucket end date is greater than the (plan start date - past due forecast days) value are
planned.

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Forecasting Demands for ATO Models

Supply Planning plans forecasts for ATO models, which typically have optional items with
planning percentages. Supply Planning also plans Sales Orders that are created for items
configured from models.
You have the option of feeding either model level forecasts or fully exploded model and option
forecasts from Demand Management into Supply Planning.

Forecast Explosion by Supply Planning

Supply Planning will perform the process of explosion when you check the plan option “Explode
Model Forecasts” as shown below

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Supply Planning explodes forecasts at the model down to the lower levels by creating
production forecasts as dependent demands. You can peg down from the forecasts at the
model level to the production forecasts at the lower level.
Supply Planning creates Production Forecast quantities based on the planning percentage and
usage quantities of the components at the lower level. Components can be other models, option
classes, options and mandatory components.
Planning percentages can be values that are either collected from Fusion Product Information
Management (PIM) or forecasted percentages calculated by Demand Management.
You can have Supply Planning use forecasted percentages by checking “Use forecasted
planning percentages instead of collected data” in plan options. You will need to run a Demand
and Supply Plan to be able to check this option.

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When you do not check the option, “Explode model forecasts” Supply Planning will assume that
Demand Management has exploded forecasts and will not do any forecast explosion.

Forecast Explosion by Demand Management

When you input demand schedules from Demand Management and uncheck “Explode model
forecasts” Supply Planning will accept exploded forecasts from Demand Management as input.
Demand Management explodes forecasts at the model down to the lower levels by creating
forecasts as dependent demands. The forecast quantities will be based on the planning
percentage of the options, option classes and models at the lower levels.
Supply Planning will consider such forecasts as independent demands. You will therefore not be
able peg down from the forecasts at the model level to the forecasts at the lower levels.

Example: Forecast Explosion of ATO Models by Supply Planning

Consider the ATO model below. Forecasts of Model 1 are input to Supply Planning. The plan
option “Explode model forecasts” is checked. The planning percentages for the options and
models are as shown below. The planning percentages are defined as part of the creation of the
ATO model configuration in Fusion Product Information Management (PIM). The plan option
“Use forecasted planning percentages instead of collected values” is unchecked. Forecast
Spreading is enabled.

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 Model 1

Mandatory
Option Class 1
Component 1

Option 1 Option 2 Model 2

Mandatory
Option Class 2
Component 2

Option 3 Option 4

Supply Planning will first spread the model forecasts and then use the sales orders of the
configured items to consume the spread forecasts. The forecasts left unconsumed at the model
level are the Net Forecasts of the model.
The Gross Forecasts, Sales Orders and Net Forecasts at the model level are as follows (the
Backward Days and Forward Days in the consumption window are assumed to be zero days):

Item Measure Day 1 Day 2 Day 3 Day 4 Day 5

*Gross Forecast 50 50 50 50 50

Model 1 Sales Order 40 30 20 10

Net Forecast 10 20 30 40 50

Note: *Gross Forecast displays the spread forecast values

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 Since “Explode Model Forecasts is checked Supply Planning will explode the Net Forecasts of
Model 1 to the lower levels as Production Forecasts based on the planning percentages.
The forecasts exploded to the lower levels are called Production Forecasts. They are as follows.

Order Planning Usage Day Day Day Day Day

Item Measure
Type Percentage Quantity 1 2 3 4 5

Net
Model 1 Forecast 100 1 10 20 30 40 50
Forecast

Option Production Production

100 1 10 20 30 40 50
Class 1 Forecast Forecast

Production Production
Option 1 50 1 5 10 15 20 25
Forecast Forecast

Production Production
Option 2 50 1 5 10 15 20 25
Forecast Forecast

Production Production
Model 2 100 1 10 20 30 40 50
Forecast Forecast

Option Production Production

100 1 10 20 30 40 50
Class 2 Forecast Forecast

Production Production
Option 3 50 1 5 10 15 20 25
Forecast Forecast

Production Production
Option 4 50 1 5 10 15 20 25
Forecast Forecast

Note: Supply Planning will create Planned Order Demands as dependent demands for
mandatory components when fulfilling forecast demands for models. Supply Planning will not
create Production Forecasts for mandatory components.
Example: Forecast Explosion of ATO Models by Demand Management
Consider the ATO model below. Forecasts of Model1 are input to Supply Planning. The plan
option “Explode model forecasts” is not checked.

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 Model 1

Mandatory
Option Class 1
Component 1

Option 1 Option 2 Model 2

Mandatory
Option Class 2
Component 2

Option 3 Option 4

The Planning Percentages are:

Option 1: 50%, Option 2: 50%, Option 3: 50%, Option 4: 50%, Model 2: 100%.
Forecast Spreading is enabled.
Since “Explode Model Forecasts is not checked Supply Planning not will explode forecasts.
Demand Management will explode the forecasts and the exploded forecasts will be part of the
input demand schedule. Supply Planning will first spread these forecasts since forecast
spreading is enabled.
Supply Planning will then consume the forecasts with the Sales Orders of the configured items.
Supply Planning will use sales order lines to determine which option forecasts are consumed by
a specific sales order
The sales orders with the configuration of Model 1*123 have the following lines:

• Model1*123
• Option 1

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 • Model 2*123
• Option 3
The sales orders of configured item Model1*123 will consume the forecasts of the options
Option 1 and Option 3. They will not consume the forecasts of the other options.
The sales orders with the configuration of Model 1*234 have the following lines:

• Model1*123
• Option 2
• Model 2*234
• Option 4
The sales orders of configured item Model1*234 will consume the forecasts of the options
Option 2 and Option 4. They will not consume the forecasts of the other options.
The Sales Orders are as follows

Item Day 1 Day 2 Day 3 Day 4 Day 5

Model 1*123 5 15

Model 1*234 10 20

The table below represents the Gross Forecasts (spread), Sales orders and Net Forecasts post
consumption.
The sales orders of both Model 1*123 and Model 1*234 consume the forecasts of Model 1.
The sales orders of both Model 1*123 and Model 1*234 consume the forecasts of Model 2
The sales orders (quantities 5 and 15 respectively) of M*123 consume the forecasts of Option 1
and Option 3.
The sales orders (quantities 10 and 20 respectively) of M*234 consume the forecasts of Option
2 and Option 4.
Planning
Item Percentage Measure Day 1 Day 2 Day 3 Day 4 Day 5

Gross
50 50 50 50 50
Forecast

Sales Order 5 10 15 20
Model 1 100
Consumed
5 10 15 20
Forecast
Net
45 40 35 30 50
Forecast

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 Planning
Item Percentage Measure Day 1 Day 2 Day 3 Day 4 Day 5

Gross
50 50 50 50 50
Forecast

Sales Order 5 10 15 20
100
Option Class 1 Consumed
5 10 15 20
Forecast
Net
45 40 35 30 50
Forecast
Gross
25 25 25 25 25
Forecast

Sales Order 5 15
Option 1 50
Consumed
5 15
Forecast
Net
20 25 10 25 25
Forecast
Gross
25 25 25 25 25
Forecast

Sales Order 10 20
Option 2 50
Consumed
10 20
Forecast
Net
25 15 25 5 25
Forecast
Gross
50 50 50 50 50
Forecast

Sales Order 5 10 15 20
Model 2
Consumed
5 10 15 20
Forecast
100
Net
45 40 35 30 50
Forecast
Gross
Option Class 2 100 50 50 50 50 50
Forecast

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 Planning
Item Percentage Measure Day 1 Day 2 Day 3 Day 4 Day 5

Sales Order 5 10 15 20

Consumed
5 10 15 20
Forecast
Net
45 40 35 30 50
Forecast
Gross
25 25 25 25 25
Forecast

Sales Order 5 15
Option 3 50
Consumed
5 15
Forecast
Net
20 25 10 25 25
Forecast
Gross
25 25 25 25 25
Forecast

Sales Order 10 20
Option 4 50
Consumed
10 20
Forecast
Net
25 15 25 5 25
Forecast

Consumption Order of Forecasts with Multiple Ship-to Consumption Levels

Supply Planning accepts multiple demands schedules for an item, each with a potentially
different ship- to consumption level. Supply Planning will use the following steps in the order
shown to establish a hierarchy of consumption levels. Assume that multiple demand schedules
each with a different ship-to consumption level (Customer Site, Demand Class or Item)
1. Use sales orders to consume forecasts in demand schedules whose ship-to
consumption level is Customer Site
2. Use sales orders to consume forecasts in demand schedules whose ship-to
consumption level is Customer
3. Use sales orders to consume forecasts in demand schedules whose ship-to
consumption level is Demand Class. Use the “Consume forecasts with no demand
class” option setting to determine the consumption order of consuming forecasts with no
demand class specified

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 4. Use sales orders to consume forecasts in demand schedules whose ship-to
consumption level is Item.
It is good practice to ensure that all forecasts for an item-organization combination are
restricted to one demand schedule. If the forecasts of an item-organization combination are
indeed present in multiple demand schedules and with the same ship-to consumption level,
forecast consumption will take place as described in the example below.
Consider an Item A with the following forecasts and sales orders.

There is a Sales Order SO1 of 100 on Day 10. There are no other sales orders.

There is a daily forecast from demand schedule DS1 of quantity 100 on Day 10.
There is a daily forecast from demand schedule DS2 of quantity 100 on Day 10.
There is a daily forecast from demand schedule DS3 of quantity 100 on Day 10.
There are no other forecasts. The ship-to consumption level is the same for all the demand
schedules.

The sales order SO1 will consume each of these forecasts. There will not be any forecasts left
after the consumption process. The only demand will be sales order SO1.

Forecast Consumption for Drop Shipped Items

Supply Planning supports forecast consumption for drop shipped items and ATO models. Sales
Orders consume forecasts in the Drop Ship Validation Organization. When a supplier is
modeled as an organization, Supply Planning uses this organization to consume forecasts. You
can model a supplier as an organization for the ability to track forecasts specific to a supplier.
When suppliers are not modeled as organizations, forecasts for the items are aggregated
across suppliers in the validation organization.
Example: Forecasts Consumption in the Validation Organization
Item A has its supplies drop shipped to the customer from Suppliers S1 and S2. The following
are the forecasts for Item A in the Drop Ship Validation Organization V1.

Item Organization Day 1 Day 2 Day 3 Day 4 Day 5

Gross Forecasts 200 200 200 200 200

Sales Orders 200

V1

Consumed Forecast 200

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 Net Forecasts 200 200 200 200

Example: Forecasts Consumption with Supplier Modeled as an Organization

Item A has two Suppliers S1 and S2. S1 is modeled as organization M1 and S2 is modeled as
organization M2. The consumption window has Backward Days as one and Forward Days as
zero.

Item Supplier Organization Day 1 Day 2 Day 3 Day 4 Day 5

Gross Forecasts 100 100 100 100 100

Sales Orders 150

S1 M1
Consumed Forecast 50 100

Net Forecasts 100 50 100 100

Item Supplier Organization Day 1 Day 2 Day 3 Day 4 Day 5

Gross Forecasts 100 100 100 100 100

S2 M2
Sales Orders 50

Consumed Forecast 50

Net Forecasts 100 100 50 100 100

Forecasts Consumption of Drop Shipped ATO Model with Supplier Modeled as a

Contract Manufacturing Organization

Supply Planning plans forecasts of ATO models in contract manufacturing organizations that
drop ship supplies to customers. As with ATO models in internal organizations you can have
model forecasts exploded either in Supply Planning or have Supply Planning accept exploded
forecasts as input from Demand Management.

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Forecasts for an option will be allocated to the relevant outsourced manufacturing organization
in which the option is manufactured. Supply Planning will consume option forecasts with the
sales orders of the configured items containing the option. The consumption will take place in
the outsourced manufacturing organization in which the option is manufactured and at the ship-
to consumption level specified for the demand schedule in plan options.

Summary

In this white paper, we looked at the different stages of forecast processing in Supply Planning.
Forecasts can be either external or generated in Demand Management.
Supply Planning first spreads forecasts based on Forecast Spreading plan option. It then
consumes forecasts based on various user settings before arriving at the net forecast at the end
of the consumption process. The Net Forecast is the forecast in response to which Supply
Planning plans and allocates supplies.
Supply Planning plans forecast for both standard items and ATO models. Forecasts can be
planned in either internal or contract manufacturing organizations. You can have forecasts of
ATO models exploded either in Supply Planning or in Demand Management.

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