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Forecast Explosion/Consumption - Setup Steps (Doc ID 106115.1)

Checked for relevance 24-APR-2011

PURPOSE
------This document is created to illustrate Forecast Explosion and Forecast
Consumption.

SCOPE & APPLICATION

------------------NOVICE. This article assumes that the user knows how to create an item,
create a BOM for an item and create a Routing for an item. In the example
below, we will be forecasting for a Planning Family of Mountain Bikes.
However, the same principles apply to Forecasting of Purchased Parts (spares).

A.

TERMINOLOGY
Forecast
-------An estimate of the future demand.
"A forecast can be determined by mathematical means using historical data,
it can be created subjectively by using estimates from informal sources,
or it can represent a combination of both techniques." (APICS Dictionary,
Eighth Edition, pg. 33). As a general rule , the higher the level of
aggregation, the more accurate the forecast. The most commonly used
dimensions of aggregation are time, geographic location and product group.
Forecast Consumption
-------------------"The process of reducing the forecast by customer orders or other types
of actual demands as they are received. The adjustments yield the value
of the remaining forecast for each period." (APICS Dictionary, Eighth
Edition, Pg. 15).
Forecasting
----------"The business function that attempts to predict sales and use of products
so they can be purchased and manufactured in appropriate quantities in
advance." (APICS Dictionary, Eighth Edition, Pg. 34).
Forecasting by Demand Class
--------------------------"You can optionally associate a demand class to a forecast when you define
the forecast name. When you place sales order demand, the forecast
consumption process consumes the forecast with the same demand class.
If the forecast consumption process does not find a forecast, it consumes
entries that have no demand class. If you place sales order demand that
does not have an associated demand class, the forecast consumption process
attempts to consume forecast entries associated with the organizational
default demand class first, and then consume entries that have no demand
class defined." (Oracle Master Scheduling/MRP and Oracle Supply Chain
Planning User's Guide Release 11, Pg. 8-2).

B.

FORECAST PREMISES
1.
2.
3.

4.

5.
6.

7.

Forecast consumption occurs in a forecast set.

Forecast sets are created to group multiple forecasts. Even if you
have only one forecast, you need to assign it to a forecast set.
Forecasts containing the same Product family/End assembly are
independent from one other and consumption of both sources is
independent.
If there are multiple forecasts for an item under the same forecast set,
the forecasts within the set are consumed in alphabetical order until
the forecast quantity is completely consumed.
If all forecasts under the forecast set are completely consumed,
over-consumption is recorded at the forecast set level.
If you enter a demand class, you limit forecast copy/merge and
forecast consumption to forecasts and sales orders with the same
demand class.
The Planning Manager must be active in order for consumption to occur.

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8.

C.

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To check the status of the Planning Manager, navigate to Planning ->

Setup ->Planning Manager. The Active box will be checked if the
Planning Manager is active. In the second block of the Planning Manager
form you can see the last date and time that the Planning Manager was
launched.
The profile option, MRP:Compute Sales Order changes must be set to yes.
Navigate to System Administrator -> Profile -> System. Query up the
profile and make sure it is set to Yes.

SETUP INSTRUCTIONS - CREATING A FORECAST

1.

Create a record in the table, MRP_PARAMETERS.

Navigate to MRP/Setup/Parameters.

Define Planning Parameters and Save.

If it is the first time you are setting up forecasts for the

organization you are in, you need to define Planning parameters for the
organization. A record is written to the table MRP_PARAMETERS. One
record must exist in this table for each organization in which you
plan to forecast.
2.

Define yourself as a Planner (Optional).

Navigate to Inventory/Setup/Planner.
A record is written to the table MTL_PLANNERS. You can assign your
Planner Code to all items you are forecasting. Later, you will be able
to search in the MRP Workbench by your Planner Code to see only demand
and supply for the items assigned to your Planner Code. The Planner
Code is assigned in the General Planning region of the item attributes
at the Organization level.

3.

Create a Planning Item (Release 10.7 or 11.0.xx).

A Planning item is used for the purpose of exploding your forecast.
It helps organize your end-assemblies and/or purchased parts as
a percentage of your forecast for the planning family under which they
fall. For example, if you sell bikes, you might want to create a
Planning Family for Mountain Bikes. Within that Planning Family,
you want to forecast for Red Mountain Bikes, Blue Mountain Bikes, and
Green Mountain Bikes. To do this:
a.
b.
c.
d.

4.

In Inventory responsibility, navigate to Items/Master Items.

Create a new Planning item with the description, "Mountain Bikes".
Do a Special/Copy From/Template = Planning Item.
Go to the BOM alternate Region.
- Check BOM allowed = X
- Set BOM item type = Planning Item

Now, create a BOM for your Planning Item (this step assumes that you
have already created part numbers, BOMs and Routings for each color of
Mountain Bike).
a.
b.
c.
d.
e.

In Bill of Material Responsibility, navigate to Bill of Materials/

Bills/Bills.
In the item field, type in your part number for "Mountain Bikes".
Fill in all other header information and tab down to the Components
Block.
In the Components Block, add the part numbers for each different
color Mountain Bike.
For each Mountain Bike you add to this BOM, make sure the Planning
Percentage is populated. The split does not have to equal 100%.
It can be more than or less than 100%. In this example, we make
the split = 100% for the purpose of simplicity.
Red Mountain Bikes - Planning% = 25
Blue Mountain Bikes - Planning% = 50
Green Mountain Bikes - Planning% = 25
Each Mountain Bike to be forecasted should:
- Be an inventory item
- Have a BOM
- Have a Routing
- Have Forecast Control attribute = Consume and Derive
- Have Customer Ordered attribute = Yes
- Have OE Transactable attribute = Yes
- Have Shippable Item attribute = Yes

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- Be assigned to the organization in which you want to forecast it.

Note:

5.

If an item's Forecast Control is not set to "Consume & Derive", the

Forecast Explosion Process will not create forecasts for any lower
level components in that item's Bill of Materials. The Forecast
explosion process is described in detail on pages 2-48 through 2-51
of the Oracle Master Scheduling/MRP and Oracle Supply Chain Planning
User's Guide for Release 11 (Part Number A58273-01).

Create a Demand Class (Optional).

a.

In MRP responsibility, navigate to Setup/Demand Class.

You can use Demand Classes to "group similar customers or sales
orders." This allows you to consume forecasts by sales orders of
a specific Demand Class. If you associate your Demand Class to a
Sales Order Line, that Sales Order Line consumes only the
Forecast that is also associated with the same Demand Class.

6.

Setup a Forecast Set and a Forecast.

a.
b.
c.
d.

In MRP responsibility, navigate to Forecast/Sets to create a

Forecast set.
Fill in the bucket type (days, weeks, periods).
Set Consume = Enabled.
Set Backward and Forward Days according to your preference.
"Backward and Forward Days describes the number of work dates
from the sales order schedule date that forecast consumption
looks backward or forward for a forecast entry to consume."
Consumption always moves backwards in workdays first. If there are
no forecast entries to consume, then it will search forward in
workdays for an entry to consume. If a suitable entry is still not
found, an overconsumption entry will be added to the Forecast Set.
Please Note: Plan options 'Consume by Forecast Bucket' and the 'Forward and
Backward days' are mutually exclusive. If both are activated, only the
'Consume by Forecast Bucket' is used.

e.
f.

Create a Forecast or Forecasts within your Forecast Set. If you

desire, associate a different Demand Class with each Forecast.
Assign items to (one of) your Forecast(s). There are three ways to
do this.
1)

Manually add items to the Forecast in the Forecast Items Block

of the Forecast Sets form.
-

Navigate to Forecast/Items.
Query up your Forecast within your Forecast Set.
Add items to your Forecast.
For each item, click on the Detail Button in the bottom
right hand corner of the Forecast Items form.
- Assign a date and quantity for each entry. If you specify
an End Date, the period of time between Date and End Date
will be divided into equal 'buckets' depending on the bucket
type chosen. The forecast quantity in each bucket will equal
the forecast quantity you specify. For example, if your
forecast entry is divided into three buckets, and you specify
a quantity of 100, each bucket will have a forecast quantity
of 100, and the total forecast quantity for your forecast
entry will be 300.
2)

Load the forecast based on a forecast rule (Statistical

Forecasting.) This method will not be elaborated on in this
article. It requires at least one year's worth of demand
history.

3)

Use the Copy/Merge Forecast Concurrent Program (MRCFAL1) to

explode your forecast for your Planning Items or Product
Families.
- Navigate to Forecast/Items.
- Enter Forecasts and Details for your Planning Family Item,
"Mountain Bikes", as described above for a manual entry.
- Go to Forecast/Copy.
- Choose a Destination Forecast (the same forecast as the
one you created entries in for your Planning Item).
- Source Type = Specific Forecast.

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- Overwrite = Yes (or No if you already have items in your

forecast that you do not wish to overwrite).
- Start Date = <earlier than first forecast date in forecast>.
- Explode = Yes.
- Submit (wait until the Concurrent Process completes normally.
- Go to Forecast/Items. Notice that the Copy/Merge Process
created entries for all of the items in the Planning Bill
and all of the lower level components with forecast control
set to "Consume and Derive".

D.

SETUP INSTRUCTIONS - FORECAST CONSUMPTION

PREREQUISITES - THE STANDARD VALUE RULE SET
1.

In order for forecast consumption to work properly, it is extremely

important that the Standard Value Rule Set be set up properly in
Order Entry. If this is not set up properly, certain data might not
get populated at the line and line detail level on a sales order,
preventing the demanded sales order line from being recognized
by the MRP Module, specifically the Planning Manager. Please use
the following information to set up your Standard Value Rule Set so
that SHIP_TO_SITE_USE_ID and DEMAND_CLASS are properly defaulted
to the line/line detail level when a sales order is created:
- Navigate to Order Entry Responsibility/Setup/Rules/Values.
- In the Standard Value Rule Set form, query up your Standard Value
Rule Set.
- While in Block, choose 'Line'.
- Select Fields and choose 'Ship To Location'.
- Place your cursor in the Defaulting Rules. Select Object = Order
and Attribute = Ship To Location.
- Follow the same steps as above for Demand Class if you are using
at least one Demand Class.
- Save your work.
- Go back to Block, and choose 'Line Schedule Detail'
- Select Fields and choose 'Demand Class'.
- Place your cursor in the Defaulting Rules. Select Object = Line
and Attribute = 'Demand Class'.
- Do the same for Fields, 'Warehouse' and 'Schedule Date'.
- Save your work.
- Exit the application and run the application again.

2.

The Standard Value Rule Sets only look at primary locations.

In order for any bill_to_site_use_id or ship_to_site_use_id
to default to the line level in order entry and consequently into
the mtl_demand table, you must set up the location you are using
on the sales order as a primary location. Here's how:
-

Navigate to Order Entry Responsibility/Customers/Standard.

Query up your customer.
In the alternate region, choose addresses.
Click the Open Button.
Check the Primary Check Box for both the Bill to and Ship to
locations you are using on your sales order.

CREATE/DEMAND YOUR SALES ORDER

1.

Creating the Order.

-

2.

Navigate to Order Entry Responsibility/Orders, Returns/Sales Orders.

Create a sales order for one of your forecasted items.
Enter all pertinent Order Header information.
Navigate to the Lines Section of your Order.
For each line, make sure that the following information is entered:
- Selling Price
- Requested, Promised and Scheduled Dates
- Warehouse
- Demand Class (if you are using one)

Booking the Order.

- While in the Sales Order Entry Form, go to Special -> Book.

3.

Demanding the Order.

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a.

Place Demand via SRS...

- Navigate to Order Entry Responsibility/Orders, Returns/Schedule/
Place Demand via SRS.
- Click the Submit button.

b.

Or Schedule the order via the SCHEDULE BUTTON

- While in the Sales Order Entry Form (after entering and saving
your order)
- Click the Schedule button.
- Click the Demand radio button in the Action Block.
- Click the Schedule Button.

c.

View the Cycle Status of your line items.

- Navigate to Order Entry Responsibility/Orders,Returns/
Orders, Returns.
- Query up your Order.
- Click the View Button.
- Place your cursor on the line item.
- Click the Cycle Status button.
- Make sure the Cycle Status is Demand Interfaced - Interfaced.

4.

At this point, if the Planning Manager is active, the sales order

line will have consumed your forecast. The current quantity in the
Forecast Entries screen, MRPFFDIF, displays as relieved.
- Navigate to Material Planning Responsibility/Forecast/Entries.
- Query up your Forecast.
- Place your cursor on the entry you expect to be consumed.
- Click the Consumptions button.
- Notice that your sales order has consumed your forecast.

5.

If your forecast has not been consumed at this point, please use
the queries in Note 117891.1 to aid in determining why your forecast
was not consumed.

RELATED DOCUMENTS
----------------Note 1017340.102 Forecast Consumption Checklist
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