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Multi-product forecasting allows you to forecast sales quantities and profits when costs or prices change. In order for the system to be able to create accurate forecasts, we need at least 1 full year of historical data for the product(s) in question.
How to start multi-product forecasting?
Go to the Product Catalog view
Filter for the products that you would like to include in a forecast
Select the product(s) with the check boxes at the far left of the product rows
To start multi-product forecasting, click on the price simulator icon at the top right of the action toolbar (represented by plot line)
Clicking the price simulator icon opens a model, from which you can build your product(s) forecast. If you don't see this icon, the module may not be enabled on your account. Multi-product forecasting is an enterprise-level feature and requires at least basic AI modules.
How to use multi-product forecasting?
Multi-product forecasting with the price simulator enables you to estimate the differences in profit and volume, for a defined period of time in the future, as price, cost or forecasting periods fluctuate.
Costs and price changes are set as percentages. For example, if you set -20 in the price change in percent field, you are asking the system to evaluate what happens if you decrease the price of all products included in the forecast by -20%. The same principle applies to the cost change in percent field.
Below the price/cost percent fields is where you define the period of time for which you are creating a product(s) forecast. There is a field to define the forecasting start date, and another field to define the forecasting end date. The further the period is from the current date, the higher the uncertainty.
I decreased the price, volume increased, but profit dropped. Why is this?
Depending on the price/profit elasticity and the costs of the product(s), increasing volumes might not mean increased profits. Look into the profit vs. price and volume vs. price graphs.