Business Forecast Systems, Inc.68 Leonard StreetBelmont, MA 02478 USALast Revised: July 13, 2015© Copyright 1999-2015 All Rights Reserved

What’s New in Forecast Pro TRAC V4

James BerryPhone: (617) 484-5050Fax: (617) 484-9219E-mail: jberry@forecastpro.comWeb site: www.forecastpro.com

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Director of Training at Business Forecast Systems, Inc. (BFS).

Holds a degree in Economics from the University of Chicago.

During his 12 year tenure with the firm, James has worked with

numerous clients representing a wide range of industries,

helping them to implement and improve their forecasting

processes. His current clients include Thermo Fisher Scientific,

FedEx Ground, Arysta Life Sciences, Irving Oil and Honeywell.

James Berry

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Upgrading from Forecast Pro TRAC version 3 to version 4

The data manager

Custom allocation

Improvements to the Override Grid

Displaying archived forecast values

Rounding to whole numbers

Modeling Improvements

Component Models

New Product Forecasting

Constant level Exponential Smoothing models

Workshop Outline

Upgrading from TRAC V3 to V4

“"The beginning is the most important part of the work.

- Plato

”

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Upgrading from Forecast Pro TRAC version 3 to version 4 is easy and direct.

Save and close your project in Version 3

Open your project in Version 4

Check to make sure the Data Manager is populated correctly

Go to File>Save As and save a new version 4 copy of your project

Once your project is saved in version 4, it will no longer work in version 3

Steps to Upgrade

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The Options Dialog Box has adapted to the new settings available in Forecast Pro TRAC Version 4.

The Options Dialog Box

No Longer Specify theData Format

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The Options Dialog Box

The Input Data Can NowBe Sorted as it is Read

Into Forecast Pro

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The Options Dialog Box

The New Constant LevelModel Can be Disabled

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The Data Manager lists the data file(s) you wish to import into Forecast Pro. The Historic Data is required, all other files are optional. Click the red Script icon ( ) to call up the Data Manager dialog box.

The Data Manager

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When you upgrade from Forecast Pro TRAC version 3 to version 4, you no longer need a secondary file. When you upgrade, the secondary file will be listed in the Conversions, Filters, and Definitions sections. You will want to remove the file where it is not being used.

The Data Manager: Upgrading

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Data Movement

Historic Data FilesExcel (.XLSX, .XLS)

Text (.MLT, CSV)

ODBC

TRAC

Output FilesNumeric Output (all input

formats and XML)

Forecast Report (Excel)

Tracking Report (Excel)

Override Report (Excel)

Exception Report (Excel)

Outlier Report (Excel)

Hotlist (Excel)

TRAC Project FilesForecast Project (.FPProj)

Forecast Archive (.DB)

Forecast Document (.FCB)

External Data FilesFilters (Excel,.CSV,ODBC)

Conversions (Excel,.CSV,ODBC)

Custom Allocation (Excel,.CSV,ODBC)

Integer Rounding (Excel,.CSV,ODBC)

External Data (Excel,.CSV,ODBC)

Overrides (Excel,.CSV,ODBC)

Modifiers (Excel,.CSV,ODBC)

Hotlist (Excel,.CSV,ODBC)

Custom Allocation

“You can never solve a problem on the level on which it was created.

-Albert Einstein

”

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Bottom-up aggregation. Create model-based forecasts at the lower level. Construct upper level forecasts by summing nested lower level forecasts.

Top-down aggregation. First, create a model-based forecast at the top level by forecasting the aggregated history. Then, create model-based forecasts at the lower levels. Finally, apply proportionality factors to lower-level forecasts so that the forecasts sum to the top-level forecast.

Custom Allocation. The user imports the allocations to use when distributing a group level forecast.

Aggregation

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Entries are quantities forecast

Model-Based Bottom-Up Top-Down Custom Allocation

(50-50)

6 Packs 70 70 84 60

12 Packs 30 30 36 60

Cans 120 100 120 120

Reconciliation Techniques

Cans

12 Packs6 Packs

Overrides

When you have your name attached to a prediction your incentives may change.

- Nate Silver”

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Systems Rows Dialog Box

This Systems Row Dialog Box allows you to:

Display previously generated forecasts in the override grid

Round the forecasts to the nearest, pre-defined integer

The Previous ForecastsTo Display

Select Which PreviousForecasts are Displayed

Round Using the Integer Scheme

Start the Rounding atThe Beginning of the

History

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A header row is required. The IRQ column must be present and labeled accordingly.

If you do not specify a rounding quantity, Forecast Pro will use the default rounding quantity.

Integer Rounding Quantity (IRQ)- Excel File Layout

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IF(condition, value1, value2) - Returns value1 if condition is true or value2 if condition is false

SUM(x, y, …) - Returns the sum of the specified set of values

AVERAGE(x, y, …) - Returns the average of the specified set of values

ABS(n) - Returns the absolute value of n

SIGN(n) - Determines the sign of n. Returns 1 if n is positive, 0 if n is zero, and -1 is n is negative.

SQR(n) - Returns n squared

SQRT(n) - Returns the square root of n

INT(n) - Rounds n down to the nearest integer

TRUNC(n) - Truncates n to an integer

ROUND(n, decimal places) - Rounds n to the specified number of decimal places

MIN(x, y, …) - Returns the smallest value in the specified set of values

MAX(x, y, …) - Returns the largest value in the specified set of values

MEDIAN(x, y, …) - Returns the median of the specified set of values

MODE(n) - Returns the mode (most frequently occurring value) of the specified set of values

Supported Override Formulas

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Forecast Pro also has custom tokens to quickly reference certain numbers:

FORECAST - Forecast row

STAT - Statistical forecast row

BASE - Baseline forecast row

OVR# - Override row “#”

HIST# - The historic row “#” years prior

SAFETY - The safety stock at the item’s specified lead time

SAFETY_ALL - The safety stock corresponding to the lead time of the current cell

DDLT - The demand during the item’s specified lead time

DDLT_ALL - The demand corresponding to the lead time of the current cell

REORDER - The reorder point at the item’s specified lead time

REORDER_ALL - The reorder point corresponding to the lead time of the current cell

YTD - Returns the calendar Year-to-Date value, using the historical value, and adjusted value

CONV – The Conversion factor

MAD - The within-sample mean absolute deviation

Override Tokens

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Forecast Pro also has custom tokens to quickly reference certain numbers:

INHER- The inherited overrides row

LOWER - The lower confidence limit based on the adjusted forecast

UPPER - The upper confidence limit based on the adjusted forecast

LEADTIME – The leadtime

HISTFC - Returns either the history value, if available, or the forecast value

MOD_MOI - Croston's model mean order interval

MOD_MOS - Croston's model mean order size

MEAN - The mean of the historic data

STDEV - The standard deviation of the historic data

Override Tokens (continued)

Constant Level Smoothing

“Time present and time past are bothperhaps present in time future and time

future contained in time past.- T.S. Eliot

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This model will set the level smoothing coefficient to a very small number

The model helps when you have items with zero or very low demand for parts of the year

Constant Level

Component Model

Whatever good things we build end up

building us.

-Jim Rohn”

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In a Custom Component Model, you have the ability to either let Forecast Pro estimate the final values for a given component or to customize the values to be used.

The model is based on the components found in an Exponential Smoothing Model

Level

Trend

Seasonality

Events

Component Model

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Custom Component Models can be used to:

Customize the trend

Set the seasonal pattern

Share the seasonal pattern of one item with another

Define the volume impact of events

Component Model Uses

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The Component Model Settings

Define the Seasonality

Name the Model

Set the initial valueequivalent to the Level of a smoothing model

Define the Trend

Assign an Event Schedule and define its impact

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You can choose the type of Trend you want to use by choosing from the dropdown. The 3 main options are:

None/No Trend

Linear Trend

Bent Trend

Customizing the Trend

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With a linear trend, you are growing/declining at a constant rate. This will appear as a straight line trend. You can set the growth rate 4 ways:

Slope – Set the consistent growth/decline per period.

End Point – Set the trend value of the last forecast point. Forecast Pro will connect the starting point to the end point with a straight line.

Total Forecast – Set the total volume for the entire forecast.

Current Year – Set the total for the current year (historic + forecast). The resultant trend will be continued beyond the current year if your forecast extends that far.

Note: the percent option is not available for linear trends

Linear Trend

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A bent trend is best thought of as a beginning point and end point. A bent trend requires you to define 2 components; a slope and any other definition of how fast the line bends up or down.

In a bent trend you set the starting and end points, then how quickly the trend “Bends”.

Bent Trend

0.000

200.000

400.000

600.000

800.000

1000.000

1200.000

1400.000

1600.000

1800.000

2000.000

bend up

Linear

bend down

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You can define the seasonality by setting the Multiplicative Indexes for each period. These will indicate whether each period is above average or below average.

Customizing Seasonality

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The user needs to assign a pre-existing event schedule. The impact can be set either in units (additive) or as a percentage (multiplicative).

Customizing Events

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When applying a Component Model to multiple items, some considerations:

Starting Point – If you customize the starting point, you will be setting the initial level and this could lead to issues when applied to items with different volumes.

Trend – If you customize any option other than the slope, this could lead to issues when applied to items with different volumes.

Event – If you use customize the event indexes using Custom Additive, this could lead to issues when applied to items with different volumes.

Applying the Model to Multiple Items

New Product Forecasting

When we create stuff, we do it because we listen to the customer, get their inputs and also throw in what we’d like to see,

too. We cook up new products.

- Steve Jobs”

“

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Assumes the initial demand pattern will be similar to an analogous product’s initial demand pattern or to a “launch profile” that you’ve created.

Can be used with or without historic demand.

When used without historic demand, an estimate of the initial sales over a specific period of time (the “launch total” over the “launch horizon”) is required.

If historic demand exists, the launch total can be estimated using the analogy series’ cumulative relative percentage.

Forecast by Analogy

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Take an existing item, and apply its “shape” to a new, similar product.

Forecast by Analogy

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

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Specified Launch Total: Set the sum of the volume over the launch period.

Launch Horizon: Set the number of periods you want the volume to cover.

Launch Date: For items with no history, set the starting period.

Automatically Extend: If your schedule is too short, use Expert Selection to extend it.

Expert Selection After: Set an ending date when the Analogy model will be replaced by Expert Selection.

Align Seasonality: Make sure a seasonal analogy series lines up properly.

Forecast by Analogy Settings

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Analogy schedules can either be:

Imported from Excel

Created dynamically within Forecast Pro from an existing item’s

Historic Data

Forecast Data

Trend

Seasonality

Analogy Schedules

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Creating Analogy Schedules

Conclusion

“It's more fun to arrive a conclusion than to justify it.

- Malcolm Forbes”

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Upgrading from Forecast Pro TRAC version 3 to version 4

New settings and data formats

The data manager

Improvements to the Override Grid

Displaying archived forecast values

Rounding to whole numbers

Modeling Improvements

Component Models

New Product Forecasting

Constant level Exponential Smoothing models

Conclusion

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BFS offers forecasting seminars, Webinars and product training workshops.

On-site, and remote-based (via WebEx) classes are available.

Learn more at www.forecastpro.com

Subscribe to our blog at theforecastpro.com

Forecasting Training and Workshops

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September 28 thru 30, 2015 in Boston Massachusetts USA

Monday, September 28th : Optional pre-conference workshopUnderstanding and Implementing the Forecasting Methods in Forecast Pro presented by Eric Stellwagen

Tuesday & Wednesday, September 29th and 30th : Main Conference featuring

Educational tutorials

User presentations

Forecast Pro demonstrations

Q&A panels

And much more

Forecast Pro User Conference 2015

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Forecast Pro User Conference 2015

September 28 thru 30, 2015 in Boston Massachusetts USA

A sample of the sessions being presented:

Unleashing the Power of the Override Grid

Improving Forecast Pro Performance

What Next? A Roadmap for Continuous Forecast Improvement

Case Study: Implementing Forecast Pro TRAC across Caterpillar’s Dealer Network

Intimate event with maximum of 60 users

Visit www.forecastpro.com for more info & to register; early bird discounts still available