November / December 2005 Volume VI Issue 6

JD Edwards Forecasting
By Greg Gibson and Terry Horner
W E1 Editors Note: Many of our
JDEtips articles are inspired by our
readers. This one was triggered by
an inquiry to our HelpDesk wondering why Forecasting wasnt coming
up with the expected answers. So,
we asked Terry Horner and Greg
Gibson to collaborate on the subject. They not only accepted the
challenge; they outdid all expectations! Read how it works, how to set
it up, how to understand and use the
results and of course the gotchas!
One of our Manufacturing reviewers remarked, I have never used
JD Edwards Forecasting and yet I
feel like an expert after reading the
article. We hope you agree!
Note: Although all of the gures
were generated on EnterpriseOne ,
the concepts and most of the directions all apply to World also.

Introduction

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JDEtips 4on Manufacturing

When we were rst asked to come

up with an article on the Forecasting
Module, all we could think of were
the inspiring words of our leader as
he red us up to meet the challenges
ahead.
Im not sure what anyone can
write about since its just a bunch of
formulas that the system uses to nd
a best-t for their last two years of
history. Then it applies the formula
to come up with a forecast. (Andy
says he resembles that remark!)
I decided anything that grabbed
his interest that hard was something
I should be up on. Soooo, I dug down
into the dusty archives of my shelves
and unearthed my early notes and
manuals to refresh my memory. I
soon found myself captivated and
mentally transported to that place

where everything is mathematically

PERFECT. Then I slapped myself
upside of the head and woke up to the
fact that we dont live in PERFECT.
We are in the cold real world where
reality intrudes on pristine mathematical models so lets look at how
Forecasting really works in JDE.
Essentially Fearless Leader is correct. The JDE World/EnterpriseOne
Software Forecasting modules use
up to two years of sales history and
apply a number of mathematical formulae to these numbers to determine
which of the formulae will best predict what the future demand for your
product will be or the best t for the
data.
These formulae are also known
as Statistical Theoretical models. In
World /EnterpriseOne software they
are:
1) Percent Over Last Year
2) Calculated Percent Over Last
Year

Sales Order
Line Item Detail
(F4211)

Proc Opt;
Both les or only
history;
Date range based
Sales Order
on Request Date Line Item History
(F42119)

3) Last Year to this Year

4) Moving Average
5) Linear Approximation
6) Least Squares Regression
7) Second Degree Approximation
8) Flexible Method (Percent Over
Months Prior)
9) Weighted Moving Average
10) Linear Smoothing
11) Exponential Smoothing
12) Exponential Smoothing
Trends and Seasonality.

with

{Only the rst 10 are available in

World, all are available in Enterprise
One}
Figure 1 is a chart that graphically
shows the path used for JD Edwards
Forecasting. You may want to refer

Supply and Demand

Includion Rules
(HIS)

Period end dates

are based on
Fiscal Periods table

Extract Detail for

AA Forecast
Type

AA Forecast
Type crated/
updated

Quantities are
accumulated based
on Request Dates
of records selected

Document Type
Line Type
Next status
Statistical
Forecasting
(R34650)

Forecast Types
01 through
12 and BF
created/updated

MRP Processing
Manually Entered or
Non-JDE generated
Forecast Types
created/updated

Other Forecast
Types (e.g. DF)

Up to 5 differeent
Forecast Types

Figure 1 JD Edwards Forecasting Process Schematic

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JDEtips 2005 Klee Associates, Inc.

November / December 2005 Volume VI Issue 6

JDEtips Journal

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JDEtips 4on Manufacturing

to it as we progress through our
discussions.

Questions, Questions,
Questions

As with all JD Edwards modules

one has choices and we all know that
these choices breed complexity. In
order to deal with this complexity in
a straightforward manner, there are
a few questions that a client needs to
answer. After you have the answers,
there is some setup that needs to be
done based on the answers given.
1. Does the client have enough sales
history to calculate a forecast?
Some of the methods need only a
few (6-12) months, but accuracy
increases the more history you
have. Try for a minimum of two
years.
2. Is this sales history in the F42019
and the F42119 les? (Tables
for the youngsters reading this). I
once helped a client who had been
live for ve years and had this
much sales history, BUT it was
all in the F4201 and the F4211
les. Their sales update was set
not to copy it to the history les.
Over the years they had developed a rather extensive catalogue
of reports based on these les
that they refused to change. As
the forecasting program looked to
the history les to create a forecast, it was necessary to write a
program to copy the F4201 and
the F4211 to the F42019 and the
F42119 while leaving the original
les intact for reporting purposes.
This was against my advise to redo the reports and let the history
be updated by setting the proper
processing option in the Sales
update program.
3. If the client is a new implementation, is their sales history on
line, or can it be converted from
another system, or does it need to
be entered?

4. The forecasts will only be as

good as the sales history they are
based on. If you do not have a
long enough history, you will be
forced to create a forecast yourself from your knowledge of the
market place. Some would call
this S.W.A.G. (Scientic Wild Ass
Guessing) but we wont. We will
say that one must project ones
sales based on our knowledge of
the performance of similar products in a similar market.

The forecasts will only

be as good as the
sales history they are
based on.

5. How does the client wish to forecast his needs? For example
if your client is a Dress Shirt
Manufacturer, they might want
to group together like items; i.e.,
dress shirts with the rst break
out into the different styles. These
would be a Summary Forecast.
They then might want to break
out the Forecast further into
style/size/color so that all individual items are forecast. This
is known as a Detail Forecast.
Summary to Detail forecasting
is very useful sometimes because
you are able to force changes at
one level to be reected in the
higher or lower levels. This is

JDEtips.com

done in retailing all the time.

When the buyers set up a promotion, they project how much their
overall sales will increase and
then force this increase down the
ladder to individual items. For
example, they might think that a
certain promotion will double the
sales in dress shirts. They would
enter the new forecast at the top
level and then force the changes
down to the individual level. If,
for instance, they project sales to
double from 50 to 100 shirts a
week and their sales are normally
25 white shirts, 15 blue shirts, and
10 tan shirts, the changes would
be applied using the percentage
of normal sales. White would get
50% of the increase, blue would
get 30%, and tan would get 20 %
of the increase.
6. What documents and line types
do you or your customer want to
be considered sales or demand?
Once this is known, you can set
up your Supply/Demand inclusion rules. This will tell the system which records from the Sales
Order History File to be included.
7. Have the scal date patterns been
set up? If you are going to do
weekly forecasting you must make
sure the 52 period date pattern is
properly set up.
Note: JD Edwards always recommended that you set up a scal date
pattern exclusively for forecasting
and use this pattern for all forecasted
items. If you mix date patterns, the
results can be unpredictable. (That
is a nice way of saying you can get
different results on each run. None of
which will be correct.) IT IS VERY
IMPORTANT TO MAKE SURE
YOU SET UP YOUR DATE PATTERNS FAR ENOUGH BACK INTO
THE PAST; I.E., TWO YEARS,
AND AS FAR INTO THE FUTURE
AS YOU WANT TO FORECAST.
(Sorry, didnt mean to yell.)
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