Chapter -1

> Engine Modes: DP and PE

In PE mode, the engine is suitable for use with Promotion Effectiveness.
In DP mode, the engine is suitable for use in demand planning applications

> Causal factors = seasons, price changes, and promotions

> The forecast tree (which you configure) controls how the Analytical Engine aggregates and splits data

> Forecast Modes

Batch Mode: Considers all the item-location combinations and generates a forecast
Simulation Mode: Engine considers only a subset of the combinations.
Subset Forecasting mode: ????

> Engine Profile

 Engine profile is a set of parameters with specific values, causal factors, forecasting models, and a forecast
tree
 When you create an engine profile, it is associated with a specific init_params table

select * from engine_profiles;

 Base
 Batch
 Booking Forecast
 DSR POS Forecast
 Forecast Install Base
 Forecast Spares Demand
 Forecast Non-Unit Maintenance Plan (UMP) Work Orders
 Simulation
 Simulation Install Base
 Simulation Spares Demand

Chapter -2
• Overview of Forecasting

 Analytical Engine calculates a set of coefficients that describe how each causal factor affects demand for
each item-location combination
 coefficients D = constant + A1*CF1 + A2*CF2 + A3*CF3 + ...
o D = demand for specific combination
o Constant = Constant demand (independent time)
o CF1, CF2 = Casual Factors
o A1, A2 = coefficients that the Analytical Engine calculates for this combination

• Causal Factors

 Causal factor is a time-varying quantity (such as price, season, or day of the week) that affects demand.
 Types of Causal Factors
o Global causal factors- example, a season is a global causal factor
o Local causal factors - example, a discount applied to a specific item in a specific sales region is a local
causal factor
 o Promotional causal factors - to specific item-location combinations and to specific promotions

• Promotions (PE Mode Only)

 The Analytical Engine does not use the promotions directly. Rather it uses the promotion attributes, such as
discount amount, display type, and so on, each of which can have a different effect on demand.

• Forecasting Models and the Engine Flow

 Demantra supports multiple Analytical Engine profiles. These engine profiles can be configured to generate
forecasts for different scenarios

• The Forecast Tree

 Forecasting is most accurate when it can be performed at the lowest possible allowed aggregation level.
 A forecast tree is associated with each of the configured batch engine profiles
 The proport mechanism controls how the aggregated forecast is split. For information on tuning proport.
 Forecast Tree Example
o The following list describes a possible forecast tree.
 Highest level: all items and all locations, aggregated together
 All items-Division
 Brand-Division
 Brand-Region
 SKU-Region
 Lowest level: SKU-Store

• Influence and Switching Effects (PE Mode Only)

• Combination-Specific Settings

 Combinations are stored in mdp_matrix table

• The Forecast Data

 The Analytical Engine writes the current forecast to one of the following fields in sales_data: Fore_0, Fore_1,
Fore_2, and so on.
 For PE mode, this is the baseline forecast.
 Demantra keeps a number of previous forecasts (as specified by the active_forecasts_versions system
parameter). The most recent batch forecast is numbered 0, the previous one is numbered 1, and so on.
When the Analytical Engine generates a new forecast, it moves the previous ones to different columns in the
database.
 Chapter -3
Configuring the Analytical Engine

• General Data Requirements

• Structure and Requirements of the Forecast Tree
• Split Forecast by Series
• Configuring SALES_DATA node-splitting
• Guidelines for the Forecast Tree
• Guidelines for Causal Factors