Forecast-based planning is oriented towards material consumption. Forecasting tools are used to determine forecast values for future requirements based on past values. These forecast values form the requirement values for the material requirements planning run.

The forecast calculation is executed at regular time intervals using the historical values for the forecast of the future requirement. This is advantageous because the automatically determined requirement is adjusted to the current consumption pattern. The forecast requirement is reduced by material withdrawal. This ensures that the part of the predicted requirement that has already been realized is not planned again.

The requirement values predicted by the system are copied in materials requirements planning and net requirements calculation is executed. In net requirements calculation, every period is checked to make sure that the forecast requirement is covered by the available warehouse stock or the fixed dispatched receipts. If forecast requirements cannot be covered due to a material shortage, the system will generate an order proposal.

The system uses the date of the forecast requirements as a basis for the requirement date. It is assumed that the forecast requirement is at the start of the period. This means that the requirement date is the first workday of the respective period.

It is enabled that the period pattern for the forecast can be specifically defined (day, week, month or posting period) and the number of forecast periods for each material. However, it is possible that the forecast’s period pattern is too vague for material requirements planning. In this case, the splitting indicator can be well used to define for each material that the forecast requirement values for the requirements planning are divided into a more precise period split. If the splitting indicator is being in use, all period splits are reduced proportionally during the reduction of the forecast requirements.

It is also possible to define how many forecast periods are to be considered in material requirements planning. The splitting indicator is defined in Customizing and assigned to the material in the material master record.

Read More on Forcast Based Planning from this Training Document (PDF).

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