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Tips and Tricks: Configure Demand Forecasting with Dynamics AX

Configure Demand Forecasting with Dynamics AX
Organizations need systems that are agile and simple, yet powerful enough to handle a high volume of transactions. Microsoft Dynamics AX 2012 has a powerful yet lightweight demand forecasting module that can be used to predict demand based on historical data, adjust the predicted demand and import values into AX forecast models.

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MS Dynamics AX 2012 demand forecasting takes advantage of familiar Microsoft technology, hence providing a higher ROI. To generate a baseline forecast, the ERP relies on the power of Microsoft SQL Server Analysis Services. On the other hand, to view or create new key performance indicators (KPIs), adjust or visualize the forecast, the module relies on the extensive functionality of MS Excel.

Demand forecasting can be used to predict both dependent demand (at any customer order decoupling point) and independent demand (from sales orders). The module can be used for mass customization together with the enhanced forecast reduction rules in AX 2012 R3.

Configuring Demand Forecasting in AX 2012

Before you begin configuration, there are a number of things to take care of. First, confirm that the SQL database can be accessed by the user account that will be generating the forecast. Here is how to enable this:

  • Locate the Dynamics AX database. (Click Databases in the SQL Enterprise Manager)
  • Click Security
  • Click Users
  • Select Properties on sqlanalysis user by right mouse clicking it
  • Enable the db_ddladmin and db_datawriter options
  • Exit the page

Next, ensure there is a Forecast Model where forecast results will be posted. Here is how to configure this:

  • Open Inventory Management
  • Click Setup
  • Open Forecast
  • Click Forecast Models

To create a new forecast, go to the top bar and click New, and provide a Name and a Model for your forecast. Finally, exit the form by clicking the Close button.

Avoid putting your products in the same allocation group. Instead, allocate them into different groups by navigating to Inventory Management, clicking Setup, opening Forecasts and clicking Item Allocation Keys.

Next, choose all the different groups for forecasting on the Item Allocation Keys form and move to the menu bar and click Assign Items for all Allocation Keys. On doing this, a form will open where you can assign the items to the group. Finally, exit the form.

Setting Up Forecasting Parameters

Having taken care of the two prerequisites, it’s time to set the forecasting values. Follow these steps:

  • Open Master Planning
  • Click Setup
  • Open Demand Forecasting
  • Click the Demand Forecasting Parameters
  • Choose the items to be used as sources for forecast history
  • Add a value for Forecast Method Used
  • Go to Forecast Dimensions
  • Add the dimensions for evaluating your forecasts
  • Close the form

To change the algorithm flags, follow these steps:

  • Go to the Master Planning page
  • Open Setup
  • Go to Demand Forecasting
  • Click Forecasting Algorithm Parameters
  • Change the parameters as you wish
  • Close the form.

Generating Forecasts

Now that everything is configured, it’s time to generate forecasts. Here are the steps:

  • Open Master Planning
  • Click Periodic
  • Navigate to Demand Scheduling
  • Click Generate Statistical Baseline Forecast. A dialog box will be displayed.
  • To see more details, navigate to the bottom and click Show More Fields.
  • Click Start to select a baseline forecast date
  • Click Start and End to select history data dates
  • To forecast custom items, filter the parameters to specific Items Allocation Keys.
  • Select Forecast Bucket and indicate the periods you want forecasted
  • Click OK

The forecast will now be generated according to the number items and periods you have set. If your configuration is correct, you will get two messages:

  • That a forecast has been created
  • That a spreadsheet is waiting for you.

Select the second message to open the spreadsheet in Excel. The opened Excel document will show all the items forecasted grouped based on your chosen parameters.

You can click the Pivot Table to see all the fields that you can examine your forecast data through.

For example, you can click Product Name to see the forecasts that make the up the item group. You can then adjust the individual product forecast buckets to get information on group forecasts.

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