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ForecastX Wizard
Tutorial
Email: sales@johngalt.com
Table of Contents
ForecastX Wizard Tutorial
Table of Contents
Part One: Introduction Tutorial Overview ForecastX Wizard Features and Functionality ForecastX Wizard Technical and Statistical Methods System Requirements and Installation Part Two: Getting Started with the ForecastX Wizard One Step Forecasting Data Cleansing Group Forecasting Event and Promotional Modeling Part Three: Enhancing the Forecasting Process Other ForecastX Products and Services Who Is John Galt? Purchase Order
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Table of Contents
ForecastX Wizard Tutorial
ForecastX Wizard
Define your forecasting process and build your baseline forecast today! The ForecastX Wizard is part of the Forecast Xpert Toolkit. It is an easy to use tool that will assist you in defining and improving your forecasting process. This tutorial for the ForecastX Wizard will show you how effortless and easy it is to create accurate forecasts. This tutorial will help you take advantage of the power and accuracy of the ForecastX Wizard. The ForecastX Wizard has the ability to perform one-step forecasting utilizing the Procast Method. This method picks the best forecast technique for each data series and has been rated one the easiest to use by PC Magizine. INSEAD Universitys M3 Competition rated ForecastX Wizard one of the most accurate forecasting tools in the world among all other forecasting products. Generally, this level of accuracy is achieved through complex steps such as rewriting the format of a particular data series, an extensive understanding of statistical methods, and having to import data into an outside forecasting tool. However, with ForecastX Wizard all levels of users novices, intermediates and expert statisticians can become Forecast Xpert.
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Table of Contents
ForecastX Wizard Tutorial
Distributions
Erlang B Erlang C Poisson
Descriptive Statistics
Auto Correlation Auto Covariance Coefficient of Determination Coefficient of Variance Covariance Correlation Coefficient Durbin-Watson Kurtosis Ljung Box Max Mean Mean Absolute Deviation Mean Square Deviation Median Min Mode Partial Auto Correlation Coefficient Range Root Mean Square Skewness Standard Deviation Sum of Square Deviation Variance
Replenishment Statistics
Confidence Interval Safety-Stock Stocking Level (Slow Moving Method)
Accuracy Statistics
AIC Adjusted R Square BIC Chi-Square Cochrane-Orcutt Confidence Interval Error Mean Absolute Percent Error Mean Error Mean Absolute Error
For definitions and explanations of the listed forecasting techniques and statistical methods, visit John Galts website at www.johngalt.com and go to the education page, then the statistical methods page, or go directly to www.johngalt.com/stat_meth.asp.
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Table of Contents
ForecastX Wizard Tutorial
Once the ForecastX Wizard is installed you will see a folder open with several different Microsoft Excel spreadsheets. These spreadsheets will be used throughout this tutorial booklet. The ForecastX Wizard Icon should appear within your Microsoft Excel toolbar. If you dont see the ForecastX Wizard icon, please contact a John Galt representative at sales@johngalt.com or 312.701.9026.
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The Intelligent Data Recognizer looks at the data and determines the following:
Organization: Automatically detects whether your data is in rows or columns Forecast Range: Determines the data range to be forecasted Dates: Determines whether your data contains dates and how those dates are formatted Labels: Determines that your data contains descriptive labels Paras: Determines the number of DRP fields that follow the labels Seasonality: Let ForecastX find the seasonality in your data or select it yourself Forecast: Set the number of periods to forecast out into the future
You are now ready to create your first forecast! 1) Simply click the Procast button to complete your forecast. 2) When the forecast is complete, click the Done button. ForecastX automatically produces a Standard Report that appears on a separate worksheet. The worksheet lists what forecasting method the ForecastX Wizard chose for each of the data series. The fitted values are listed in italics below the actual values for each series. As you scroll to the right on the spreadsheet, you will notice that the ForecastX Wizard has listed the forecast values in bold. To the right of the forecasted values, the ForecastX Wizard has produced four accuracy statistics that can help you determine how trustworthy the forecast is.
Mean Absolute Percentage Error (MAPE) tells you the overall average of the error measurements ForecastX produced. This value should be close to or below 20% to be considered accurate.
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R-Square lets you know how well the fitted values compare to the actual values, and should be considered accurate the closer it is to 100%. Mean gives you the average values of each series. Standard Deviation tells you how far away each data point is from the average data point in the data set.
You have just produced an accurate, one-step forecast with Procast. Data Cleansing As an advanced option, ForecastX Wizard users can use the Data Cleansing button to improve the accuracy of the forecast. Options found on the Data Cleansing Screen include: Replacement of Outliers Replacement of Missing Values Removal of Zeros Apply Tracking Signal Holdback Evaluation Range Forecast
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Group Forecasting
The Group By tab provides Top Down and Bottom Up allocation. Top Down Allocation is a useful technique to use when data at a detail level does not provide an accurate forecast but the aggregate level provides stability for a more accurate forecast. The aggregate level forecast is then allocated down to the detail series. Using the same spreadsheet, ForecastXTrainingSet.xls and the Procast worksheet, open the ForecastX Wizard. 1) Click the ForecastX icon, and the Data Capture screen appears, click on the Group By tab 2) Under Group By, check the Group Forecast box 3) For Allocation Type, check the Top Down option 4) Under Group By, check the Description circle and make sure that Column A is showing in the pull down box 5) For the Allocation By section, check Historical and then click finish! Reviewing the results, Notice that ForecastX Wizard created forecasts for Total Shirts and Total Pants as well as the detailed level forecasts.
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1) Highlight the Months and Newspaper Sales data (rows 1-40, columns A & B) and open
the ForecastX Wizard.
With the Data Capture screen open, notice that the Wizard has recognized that the data is arranged in columns, not rows. 2) Click on the Reports tab and select Standard and the check Chart. 3) Click Finish and review the forecast.
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The Wizard creates the standard report and a graph of the results. You will notice that the forecasted results and error measurements reflect a forecast without any type of event modeling. Using the same workbook, ForecastXTrainingSet.xls, and the Event Modeling worksheet, you can now see what happens when Event Modeling is used. 1) Highlight Months and Newspaper Sales (rows 1-40, columns A & B) and open the ForecastX Wizard. 2) With the Data Capture screen open, click on the Forecast Method tab.
3) Under Forecasting Techniques, use the pull down bar to select Event Model.
4) Under Event Flags, click inside the box. This will bring up the Data Selection screen.
5) Define the event flag data ranges by highlighting column C Marketing Plan and then click Done which brings you back to the Forecast Method screen. 6) Click on the Report tab to bring up the Report Options screen. Uncheck the Standard report, check Audit and click Finish!.
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Now we can understand the effect of the events on Newspaper Sales and see how our error measurements have improved. The Audit Trail report provides you with additional statistical data. By selecting the More tab on the Statistics screen, additional statistical choices may be added. This report includes an event index, which represents each events lift factor over the base forecast.
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1) Highlight the first cell of data and open the ForecastX Wizard. 2) On the Data Capture screen verify that the Paras Option is set to 5. 3) Click on the Reports tab and select DRP Report and the DRP Options screen appears. 4) Assign the fields contained in the data file to those on the DRP Options screen. a. Assign the Onhand field to the Initial Onhand option. b. Assign the PerCoverage field to the Min. Period Cov. option. c. Assign the Reorder Qty field to the Initial Reorder Point option. d. Assign the ROP Flag field to the UseROP option. e. Click the selection box for the Order Lead Time Same as Safety Stock Lead Time option. 5) Click OK to save the report parameters and return to the Reports screen. 7) Uncheck the Standard report and click Finish!.
8) When the forecast is complete, click Done. 9) A new workbook is created containing the DRP Report. Click on the new workbook to
display.
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This report provides all pertinent DRP information needed to make solid planning decisions about your business. It also allows you to understand the effect changes in safety stock and order lead time can have on the overall planning process and inventory levels. The Auto Filter option allows you to customize the data displayed on the report. For example, you can view just the Turns for Pants only. 1) Click on the Category pull down and select the Pants option.
2) Click on the Type pull down and select the Turns option. The report redisplays with
only the turns information for pants.
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John Galt has additional support for its product lines. Check out the Online User Forum and ask your sales representative about joining a User Group in your area: Interact with Other John Galt Users Via an Online Forum Exchange Information and Brainstorm on Best Practices Share Knowledge and Experiences in Forecasting, Demand Planning, and ForecastX Products Maximize your Knowledge and Investment
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Key components:
Demand Management Engine Inventory Management Rough Cut Capacity Planning Promotional Performance Management, Sales and Operation Planning Sarbanes Oxley Reporting and the Planning Portal.
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