Ibp 600

IBP600
Configuration for Demand
.
.
PARTICIPANT HANDBOOK
INSTRUCTOR-LED TRAINING
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Course Version: 2105
Course Duration: 2 Day(s)
Material Number: 50157227
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Contents
vii Course Overview
1 Unit 1: Introduction to IBP for Demand
3 Lesson: Introducing IBP for Demand

15 Lesson: Explaining Demand Planning
18 Lesson: Describing Model Components - Master Data Types and
Key Figures
29 Exercise 1: Use IBP for Demand in Excel
35 Unit 2: Data Preparation
36 Lesson: Cleaning Data Automatically

43 Exercise 2: Clean Historical Sales Data
49 Lesson: Cleaning Data Manually
55 Unit 3: Forecasting
57 Lesson: Using Forecast Profiles

77 Exercise 3: Use Statistical Forecasting
83 Lesson: Determining the Best Forecast Model
85 Exercise 4: Create a Forecast Profile Using the Best Model
91 Lesson: Assigning Forecast Models
95 Exercise 5: Assign Forecast Models
101 Lesson: Using Multiple Linear Regression
103 Lesson: Using Composite Forecasting
105 Exercise 6: Use a Composite Forecast
109 Lesson: Incorporating Market Input
111 Exercise 7: Incorporate Market Input into the Forecast
115 Lesson: Measuring Performance Using Alerts
119 Unit 4: Lifecycle Planning
120 Lesson: Planning Product Lifecycles

123 Exercise 8: Forecast a New Product
128 Lesson: Using Phase-in and Phase-out Profiles
135 Exercise 9: Use Phase-in and Phase-out Profiles
139 Lesson: Realigning Data
147 Exercise 10: Realign Data
153 Unit 5: Promotion Planning
154 Lesson: Planning Promotions

161 Exercise 11: Plan Promotions
167 Lesson: Creating Promotions
173 Lesson: Managing Past Promotions
© Copyright. All rights reserved. v

179 Unit 6: Demand Plan Release
180 Lesson: Using Financial Key Figures and Pricing

183 Exercise 12: Convert Quantities to Financial Figures
187 Lesson: Releasing a Demand Plan
189 Exercise 13: Release a Demand Plan
192 Lesson: Measuring Forecast Performance
197 Exercise 14: Measure Forecast Performance
201 Lesson: Using Analytics and Dashboards
206 Lesson: Using Snapshots
209 Exercise 15: Work with Snapshots
215 Unit 7: Forecast Accuracy
217 Lesson: Using ABC and XYZ Segmentation

224 Lesson: Using Time Series Analysis
227 Exercise 16: Use Time Series Automation Analysis
231 Lesson: Setting up Alerts for Forecast Accuracy
237 Lesson: Performing Analysis in the SAP Fiori Web UI and the Excel
UI
241 Lesson: Tailoring Your Forecasts
245 Unit 8: Demand Sensing
247 Lesson: Introducing Demand Sensing

249 Lesson: Describing the Model Component Demand Sensing
259 Lesson: Managing Demand Sensing
271 Exercise 17: Use Demand Sensing
277 Exercise 18: Review Demand Sensing Results
279 Exercise 19: Run a Demand Sensing Update
285 Lesson: Tailoring the Demand Sensing Algorithm
286 Lesson: Approving the Demand Sensing Result
289 Exercise 20: Approve the Demand Sensing Result
vi © Copyright. All rights reserved.

Course Overview
TARGET AUDIENCE
This course is intended for the following audiences:
● Application Consultant
● Support Consultant
● Super / Key / Power User
© Copyright. All rights reserved. vii

viii © Copyright. All rights reserved.
UNIT 1 Introduction to IBP for Demand
Lesson 1
Introducing IBP for Demand 3
Lesson 2
Explaining Demand Planning 15
Lesson 3
Describing Model Components - Master Data Types and Key Figures 18
Exercise 1: Use IBP for Demand in Excel 29
UNIT OBJECTIVES
● Explain IBP for Demand

● Explain Demand Planning
● Explain master data types and key figures
© Copyright. All rights reserved. 1

Unit 1: Introduction to IBP for Demand
2 © Copyright. All rights reserved.

Unit 1
Lesson 1
Introducing IBP for Demand
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Introduction to IBP for Demand
Figure 1: Integrated Business Planning Powered by SAP HANA – a Single Data Model to Swiftly Drive
Collaboration and Action in your Business
SAP IBP is a complete system that can be leveraged to manage a corporation’s supply chain
functions. It is an SAP HANA based cloud offering with several individual modules that
manage a specific process. All of the modules can be used together for a robust supply chain,
which gives individuals from various departments, end-to-end visibility into the health of the
supply chain.
Many corporations today operate at a global level. Volatility and competition is high, and
meeting customer service levels is critical.

Figure 2: Supply Chain Needs to Adapt to New Business Realities
Animation: Supply Chain Needs to Adapt to New Business Realities

For more information on Supply Chain Needs to Adapt to New Business Realities,
please view the animation in the lesson Introducing IBP for Demand, online in the
SAP Learning Hub.
In such a competitive, changing global market, agility, visibility, and accuracy are critical for a
corporation's survival. SAP IBP brings data, people, and scenarios together in one place for
greater business advantage.
Figure 4: One Person’s Challenge is Another Person’s Opportunity
SAP solutions help you to reach your goal using state-of-the-art business processes,
connected planning processes, leveraging end-to-end visibility, and faster planning cycles.

Lesson: Introducing IBP for Demand
Figure 5: How Solutions from SAP Help You Reach Your Goal
Animation: How Solutions from SAP Help You Reach Your Goal
For more information on How Solutions from SAP Help You Reach Your Goal,
SAP Learning Hub.
SAP IBP is a world class integrated business planning solution that enables supply chain
leaders to balance demand plans with network constraints and attain profitability goals.
Figure 7: Introducing SAP Integrated Business Planning

Animation: Introducing SAP Integrated Business Planning

For more information on Introducing SAP Integrated Business Planning, please
view the animation in the lesson Introducing IBP for Demand, online in the SAP
Learning Hub.
One integrated model, based on an SAP HANA state-of-the-art architecture, ensures the
ability of real-time planning and monitoring, flexibility, and integrated business processes.
Figure 9: The Idea: Simplified Experience, Unified Empowerment
Animation: The Idea: Simplified Experience, Unified Empowerment

For more information on The Idea: Simplified Experience, Unified Empowerment,
SAP Learning Hub.
This course focuses on Demand management processes as covered by the SAP IBP for
Demand solution.

Figure 11: SAP Integrated Business Planning Solution
SAP IBP helps tackling today’s challenges in business and in daily work. On the one hand, a
high market volatility, increases variation in demand, and increases customer demand. On the
other hand, poor forecast accuracy, inefficient operations, low service level, and excess
inventory are the challenges.
Figure 12: What Problems Are We Solving?

Animation: What Problems Are We Solving?

For more information on What Problems Are We Solving?, please view the
animation in the lesson Introducing IBP for Demand, online in the SAP Learning
Hub.
Unfortunately, things rarely go exactly as expected on the demand side — and they multiply
over the entire supply chain. Examples for demand factors are promotions or simply time-
varying demand.
Figure 14: Things Rarely Go Exactly as Expected on the Demand Side
Compare the forecasting and planning activities to maps and GPS you use for navigation.
Then, demand sensing would be a function that concretely provides interactive response from
the current driving situation — like the opportunity for blind spot monitoring, lane sensing, or
traction control.

Figure 15: Introduction to IBP for Demand (1 of 4)
Animation: Introduction to IBP for Demand (1 of 4)

For more information on Introduction to IBP for Demand (1 of 4), please view the
animation in the lesson Introducing IBP for Demand, online in the SAP Learning
Hub.
Traditional Demand planning is mid-to-long term and at a higher level. Demand Sensing is
shorter term (weeks) and is more granular. In IBP for Demand, it is possible to manage both
the shorter and longer term demand requirements.

Figure 17: Intro to IBP for Demand (2 of 4)
Two major components feed the forecasting engine of SAP IBP for Demand: the PAL
(predictive analysis library, which is part of SAP HANA), and the SCAL (supply chain
algorithm library). Based on these libraries, optimization is possible.
Figure 18: "Predictive" and SAP Integrated Business Planning for Demand
Animation: "Predictive" and SAP Integrated Business Planning for Demand

For more information on "Predictive" and SAP Integrated Business Planning for
Demand, please view the animation in the lesson Introducing IBP for Demand,
online in the SAP Learning Hub.
Here we show the major key capabilities and business values of SAP IBP for Demand
summarized on a single page.

Figure 20: SAP Integrated Business Planning for Demand: Vision
With the two components mid-term or long-term forecasting and demand sensing, SAP IBP
for Demand has two integrated forecasting techniques on board. Demand sensing further
specifies the short-term forecast taking into account short-term boundary conditions.
Figure 21: Mid to Long Term Planning vs Short Term Planning
Animation: Mid to Long Term Planning vs Short Term Planning

For more information on Mid to Long Term Planning vs Short Term Planning,
SAP Learning Hub.

Due to the more granular time and data and the specific nature of demand sensing, the plan
becomes closer to the execution requirements.
Figure 23: Bridging the Gap Using Demand Sensing
Demand sensing affects the 'execution' type of activities more as it is within a much shorter
horizon than demand planning.
Figure 24: What Planning Processes Does Demand Sensing Impact? – Illustration of the Different Planning
Horizons
The following statements are typical findings and questions that can be heard in this planning
environment.

Figure 25: Simplification – What We Have Heard
LESSON SUMMARY
You should now be able to:


Unit 1
Lesson 2
Explaining Demand Planning
LESSON OBJECTIVES
Demand Planning
With SAP IBP, demand management functionality spans the entire planning spectrum from
more strategic planning like Sales and Operations Planning to operational demand planning,
including demand sensing for very short term demand planning. Statistical models allow you
to develop accurate mid-term forecasts while demand sensing allows you to react to those
near term demand changes that occur while SAP IBP provides the platform to collaborate
between groups (e.g. Marketing, Sales and Supply Chain) to add business intelligence to the
forecast for the most accurate forecast you can get. All of this allows you to ensure that you
are reacting to changes in demand and deploying product to the right place to satisfy that
demand.
Figure 26: A Streamlined Approach to Demand Planning
The following table shows the tools that are available in SAP Integrated Business Planning for
demand.
Tool Description
Statistical Forecasting If you want to create long-term forecasts,
you need a forecast model with
preprocessing, forecasting and
postprocessing algorithms, an application

Tool Description
job template to run the forecast and the SAP
IBP Excel add-in to see the results
Demand Sensing If you want to create short-term forecasts
based on the sensed demand, your planing
area and forecast model need to fulfill special
requirements
Promotion Integration If you want to crete a more accurate demand
plan, you can integrate trade promotions
data from external trade promotions
planning systems. That is, you can run
statistical forecasting on a data basis that
doesn't contain the impact of promotions on
the historical sales figures. At the end of the
forecast process, you can include the
planned future promotions in your final
demand plan
ABC/XYZ Segmentation If you want to focus on a set of items in
demand planning, you can categorize the
selected planning objects based on various
segmentation measures and thresholds
New Product Introduction If you want to create forecasts for new
products, for which no historical values are
available, you can identify and consider
products that have a similar historical sales
pattern and assign them as reference
products to the new product
Time Series Analysis If you want to identify patterns in individual
time series data such as Trend, Seasonality,
Continuous, and Irregular as well as
significant changes, for example, level shifts
where the mean of the time series values
alters significantly or trend changes where
the direction or slope of a trend alters
significantly. Based on these insights, you
can select the most suitable forecast
algorithms
Driver-Based Planning If you want to capture business drivers such
as risks or opportunities. You can capture
qualitative and quantitative information for
them by evaluating their likely effects and
expressing those effects in key figure values
for multiple planning levels. You can also
consider the drivers in your supply chain plan
SAP provides a predefined model for demand planning in IBP – SAP6 standard planning area
for Demand.
The figure shows the standard statistical forecasting process.

Lesson: Explaining Demand Planning
Figure 27: Standard Statistical Forecasting Process
Animation: Standard Statistical Forecasting Process

For more information on Standard Statistical Forecasting Process, please view
the animation in the lesson Explaining Demand Planning, online in the SAP
Learning Hub.
LESSON SUMMARY

Unit 1
Lesson 3
Describing Model Components - Master Data
Types and Key Figures
LESSON OBJECTIVES
Master Data Types

Master data types represent categories of information, for example, customer, location,
product, or resource. You use master data types to segment planning data.
Figure 29: Master Data Types Used in the SAP6 Model for Demand
Every data value in IBP is associated with some master data. IBP master data structures are
called Master Data Types (MDTs). Some examples are given in the following figure.

Lesson: Describing Model Components - Master Data Types and Key Figures
Figure 30: SAP6: Master Data Types
The following figure shows what the S6PRODUCT master data type looks like.
Figure 31: Master Data Type S6PRODUCT
The following figure shows what the S6LOCATION master data type looks like.

Figure 32: Master Data Type S6LOCATION
The following figure shows what the S6CUSTOMER master data type looks like.
Figure 33: Master Data Type S6CUSTOMER
The following figure shows what the S6LOCATIONPRODUCT master data type looks like.
Figure 34: Master Data Type S6LOCATIONPRODUCT

The following figure shows what the S6CURRENCY, S6CURRENCYTO, and

S6EXCHANGERATE master data types look like.
Figure 35: Master Data Types S6CURRENCY, S6CURRENCYTO, S6EXCHANGERATE
Animation: Master Data Types S6CURRENCY, S6CURRENCYTO,

S6EXCHANGERATE
For more information on Master Data Types S6CURRENCY, S6CURRENCYTO,
S6EXCHANGERATE, please view the animation in the lesson Describing Model
Components - Master Data Types and Key Figures, online in the SAP Learning
Hub.
The following figure shows what the S6UOMTO and S6UOMCONVERSION master data types
look like.
Figure 37: Master Data Types S6UOMTO and S6UOMCONVERSION

Animation: Master Data Types S6UOMTO and S6UOMCONVERSION

For more information on Master Data Types S6UOMTO and
S6UOMCONVERSION, please view the animation in the lesson Describing Model
Hub.
The following figure shows what the S6SALESORDER and S6DELIVERY master data types
look like.
Figure 39: Master Data Types S6SALESORDER, S6DELIVERY
Animation: Master Data Types S6SALESORDER, S6DELIVERY

For more information on Master Data Types S6SALESORDER, S6DELIVERY,
please view the animation in the lesson Describing Model Components - Master
Data Types and Key Figures, online in the SAP Learning Hub.
It is vitally important to load the master data in the correct sequence, that is, from simple to
compound to reference.

Figure 41: Prerequisites for Master Data Upload
Animation: Prerequisites for Master Data Upload

For more information on Prerequisites for Master Data Upload, please view the
animation in the lesson Describing Model Components - Master Data Types and
Key Figures, online in the SAP Learning Hub.
Key Figures
Key figures are series of numbers over time, where each number corresponds to a particular
time period value.
Key figures have a business context: In SAP Integrated Business Planning, end users view and
use key figures in the planning views or in Analytics. Every key figure has a base planning level.
Key figures are associated with a key, which is a combination of attributes from one or more
master data objects.
Table 1: Key Figures for Mid- to Long-Term Demand Planning

Key Figure ID Stored Calcu- Editable UOM Curren- Lowest Busi-
lated Conver- cy Con- Time ness
sion version Granu- Meaning
larity As-
signed
STATISTI- X X X Techni-
CALFCSTQTY cal
Week
SALESFCSTQTY X X X X Techni-
cal
Week
MARKET- X X X X Techni-
INGFCSTQTY cal
Week

Key Figure ID Stored Calcu- Editable UOM Curren- Lowest Busi-

lated Conver- cy Con- Time ness
sion version Granu- Meaning
larity As-
signed
DEMANDPLAN- X X X X Techni-
NINGQTY cal
Week
CONSENSUSDE- X X X X Techni- Consen-
MAND cal sus De-
Week mand
FINALCONSEN- X C Techni-
SUSDEMAND cal
Week
ACTUALSQTY X X Daily
ACTUALSREV X X Techni-
cal
Week
ACTUALSPRICE X X Techni-
cal
Week
STATISTI- X X X Techni-
CALFCSTPRICE cal
Week
SALESFCSTPRICE X X Techni-
cal
Week
SALESFCSTREV X X Techni-
cal
Week
CONSENSUSDE- X X Techni-
MANDREV cal
Week
MARKET- X X Techni-
INGFCSTQTYREV cal
Week
STATISTICALEX- X X X Techni-
POSTFCSTQTY cal
Week
FCSTMAPE X X
FCSTMASE X X
Typically, several lines of business within a company are involved in demand planning. The
key figure definitions of SAP6 can consider these different needs.

Figure 43: Mid-Term of Long-Term Demand Planning
Animation: Mid-Term of Long-Term Demand Planning

For more information on Mid-Term of Long-Term Demand Planning, please view
the animation in the lesson Describing Model Components - Master Data Types
and Key Figures, online in the SAP Learning Hub.
In standard SAP6, the sales history is usually modeled using order data (which is required for
Demand Sensing).
In case Demand Sensing is not in scope during implementation, the sales history could also
be loaded as time series data and used for the Statistical Forecasting.
The following is an example of quantity key figures used by the different roles involved – and
the consensus key figure to be used for the final agreement.
Figure 45: Key Figures for Mid- to Long-Term Demand Planning - Quantity Key Figures
The following figure shows an example of how price key figures are used.

Figure 46: Key Figures for Mid- to Long-Term Demand Planning - Value/Price Key Figures
The following figure shows more key figures for the future and ex-post forecast used to
identify the accuracy of fit of the forecasting model.
Figure 47: Key Figures for Mid- to Long-Term Demand Planning - Statistical Key Figures
In the following figure, we see key figures to store data at the order level.

Figure 48: Key Figures Used to Store Data at the Order Level
In the following figure, we see key figures to store order data aggregated at the time series
level.
Figure 49: Key Figures for Order Data Aggregated at the Time Series Level
Animation: Key Figures for Order Data Aggregated at the Time Series Level
For more information on Key Figures for Order Data Aggregated at the Time
Series Level, please view the animation in the lesson Describing Model
Hub.

There are further special key figures that are just used as helpers to enable actions with other
key figures.
Figure 51: Special Key Figures
Animation: Special Key Figures

For more information on Special Key Figures, please view the animation in the
lesson Describing Model Components - Master Data Types and Key Figures,

Unit 1
Exercise 1
Use IBP for Demand in Excel
Simulation: Use IBP for Demand in Excel

For more information on Use IBP for Demand in Excel, please view the simulation
in the lesson Describing Model Components - Master Data Types and Key
Figures online in the SAP Learning Hub.
The purpose of this exercise is to prepare the Excel UI for working with IBP for Demand.
1. In Microsoft Excel, create an IBP connection and log on to the system using the
credentials supplied by the instructor.
2. Create a Favorite called Demand Planning by using the Demand Planning template as the
starting point and choose the relevant key figures and planning view settings given in the
following table.
Selection Value
Template Demand Planning Quantities
Time Setting Weekly

Current week - 10 to Current week + 10
Planning Level Product ID, Location ID, Customer ID
Key Figures Actuals Qty

Delivered Qty Adjusted
Statistical Forecast Qty
Sales Forecast Qty
Demand Planning Qty
Consensus Demand without Promotions
Unit of Measure KG
3. Create a filter for the product number provided by the instructor. Use the information in
the following table.
Attribute Value
Product ID HT_0##, HT_1##, and HT_2##

Unit 1
Solution 1
Use IBP for Demand in Excel
Simulation: Use IBP for Demand in Excel

For more information on Use IBP for Demand in Excel, please view the simulation
in the lesson Describing Model Components - Master Data Types and Key
Figures online in the SAP Learning Hub.
The purpose of this exercise is to prepare the Excel UI for working with IBP for Demand.
1. In Microsoft Excel, create an IBP connection and log on to the system using the
credentials supplied by the instructor.
a) Open Microsoft Excel and choose the SAP IBP tab.
b) Choose Log On Connection. The Logon dialog box appears.

The Logon dialog box appears.
c) Choose the ... button to the right of the Connection field.

The Connection Manager dialog box appears.
d) Choose Create to create the connection with the logon credentials supplied by your
instructor.
e) In the Connection Name field, enter ZSAP6.
f) In the Server URL field, enter the server address provided by your instructor and
choose the Look Up Planning Area button.
g) Enter ID and password and Choose planning area ZSAP6 in the dropdown when all
available PAs will be listed.
h) Make sure that the SAML-Based Connection is enabled.
i) Choose OK.
2. Create a Favorite called Demand Planning by using the Demand Planning template as the
starting point and choose the relevant key figures and planning view settings given in the
following table.
Selection Value
Template Demand Planning Quantities
Time Setting Weekly

Current week - 10 to Current week + 10

Selection Value
Key Figures Actuals Qty

Delivered Qty Adjusted
Statistical Forecast Qty
Sales Forecast Qty
Demand Planning Qty
Unit of Measure KG
a) Logon to the connection that you created.
b) In the Planning View section of the ribbon, choose New View → From Template, and
choose the Demand Quantities template.
c) Choose Time Setting Weekly.
d) Choose Planning Level Product ID and Customer ID.
e) Choose the following Key Figures: Actuals Qty, Delivered Qty Adjusted,
Statistical Forecast Qty, Sales Forecast Qty, Demand Planning Qty and
Consensus Demand without Promotions.
3. Create a filter for the product number provided by the instructor. Use the information in
Attribute Value
Product ID HT_0##, HT_1##, and HT_2##
a) In the Filter tab, create the filter with the information in the table provided.
b) Save the filter settings by choosing Add, enter Prod ## as the name of your filter, and
choose Add.
c) Choose OK.
d) Save the view as a favorite. Choose Planning View → Favorite → Add. Name the view
Demand Planning.

LESSON SUMMARY

Unit 1
Learning Assessment
1. What are some of the time-independent key figures that are used in standard SAP6
solution
Choose the correct answers.
X A FCSTMAPE
X B STATISTICALFCSTQTY
X C FCSTMASE
X D STATISTICALFCSTEXPOSTQTY

Unit 1: Learning Assessment

UNIT 2 Data Preparation
Lesson 1
Cleaning Data Automatically 36
Exercise 2: Clean Historical Sales Data 43
Lesson 2
Cleaning Data Manually 49
UNIT OBJECTIVES
● Prepare data automatically

● Prepare data manually

Unit 2
Lesson 1
Cleaning Data Automatically
LESSON OBJECTIVES
Gather and Cleanse Historical Data

To create forecasts for the future you need data from the past, which usually means the sales
history of a product from a certain time period. This data is gathered from SAP ERP or APO
DP via CPI-DS or by uploading of CSV files using the Data Integration Jobs app. When the data
is available, it can be checked for missing values, outliers, and promotion-related sales lifts,
and consolidated with the help of the preprocessing algorithms selected for the forecast
model you’re using.
Figure 54: Create Baseline Sales History as Foundation for a Good Forecast
There are 3 methods to cleanse your data.

Lesson: Cleaning Data Automatically
Historical Data Outlier Correction
Figure 55: Outlier Correction
Missing Value Substitution

With the help of preprocessing algorithm we can substitute missing values in SAP IBP
depending on the time scope as shown in the following figure.
Figure 56: Time Scope of Substitution
Animation: Time Scope of Substitution

For more information on Time Scope of Substitution, please view the animation
in the lesson Cleaning Data Automatically, online in the SAP Learning Hub.
Models for Outlier Detection

There are two models in SAP IBP that help to detect outliers in your historical data:

Unit 2: Data Preparation
● Interquartile Range Test

● Variance Test
Figure 58: Interquartile Range Test
Figure 59: Variance Test
Outlier Detection Bounds

If data values are out of bounds, the system corrects the values. The following figure shows
the upper-bound and the lower-bound.

Animation: Historical Data Outlier

For more information on Historical Data Outlier, please view the animation in the
lesson Cleaning Data Automatically, online in the SAP Learning Hub.
Outlier Correction Methods

When we have detected all outliers, we can correct them if necessary with the help of the
different correction methods.
No Correction:
Outliers are not corrected. Outlier detection is used for information purposes only. You must
open the business log in the status after the outlier detection job and you can view how the
system detected the outliers.
Figure 61: No Correction Method
Animation: No Correction Method

For more information on No Correction Method, please view the animation in the
lesson Cleaning Data Automatically, online in the SAP Learning Hub.
Correction Methods that Exclude Outliers

The three correction methods that exclude outliers are:
● Correction with Mean Excluding Outliers
● Correction with Tolerance Excluding Outliers
● Correction with Median Excluding Outliers

Figure 63: Correction Methods that Exclude Outliers
Animation: Correction Methods that Exclude Outliers

For more information on Correction Methods that Exclude Outliers, please view
the animation in the lesson Cleaning Data Automatically, online in the SAP
Learning Hub.
Correction Methods that Optionally Take Outliers into Account

The correction methods that can optionally include outliers are:
● Correction with Mean
● Correction with Tolerance
● Correction with Median
Figure 65: Correction Methods that Optionally Take Outliers into Account

Animation: Correction Methods that Optionally Take Outliers into Account

For more information on Correction Methods that Optionally Take Outliers into
Account, please view the animation in the lesson Cleaning Data Automatically,


Unit 2
Exercise 2
Clean Historical Sales Data
Simulation: Clean Historical Sales Data

For more information on Clean Historical Sales Data, please view the simulation
in the lesson Cleaning Data Automatically online in the SAP Learning Hub.
Task 1: Create a Model for Automatic Outlier Cleaning

Besides manual cleaning, IBP comes with functionality that can clean the outliers
automatically. We set this up in this task.
1. Create a new forecast profile called OutlierCorrection## that detects outliers using
the variance test in 12 periods of weekly history and correct them using the mean method.
Detect outliers in the Actuals Qty key figure and store the corrections in the ADJDELIVQTY
key figure.
Field Value
Model Name OutlierCorrection##
Periodicity Weekly
Historical Periods 12
Outlier Detection Method Variance Test
Multiplier 1
Input for Algorithm Actuals Qty
Save Result in Delivered Qty. Adjusted
Outlier Correction Method Correction with Mean
2. Enter the details of the new forecast profile using information from the table provided.
Task 2: Execute the Model for Outlier Cleaning

After we have configured our outlier correction model, we need to execute the calculation.
1. Log in to the Excel UI and choose your planning view favorite.
2. Run the outlier correction calculation and observe the result.

Field Value
Time Period Weekly
Planning Level Product ID, Customer ID

Field Value
Forecast model to be used OutlierCorrection##
UoM to ID KG
Filter HT_0##

Unit 2
Solution 2
Clean Historical Sales Data
Simulation: Clean Historical Sales Data

For more information on Clean Historical Sales Data, please view the simulation
in the lesson Cleaning Data Automatically online in the SAP Learning Hub.
Task 1: Create a Model for Automatic Outlier Cleaning

Besides manual cleaning, IBP comes with functionality that can clean the outliers
automatically. We set this up in this task.
1. Create a new forecast profile called OutlierCorrection## that detects outliers using
the variance test in 12 periods of weekly history and correct them using the mean method.
Detect outliers in the Actuals Qty key figure and store the corrections in the ADJDELIVQTY
key figure.
Field Value
Model Name OutlierCorrection##
Periodicity Weekly
Outlier Detection Method Variance Test
Multiplier 1
Input for Algorithm Actuals Qty
Save Result in Delivered Qty. Adjusted
Outlier Correction Method Correction with Mean
a) Log in to the SAP Fiori User Interface with the login credentials provided by the
instructor.
b) In the Demand Planner group, choose the Manage Forecast Model app.
c) Choose Create, and select the planning area ZSAP6.
2. Enter the details of the new forecast profile using information from the table provided.
a) Enter the model name OutlierCorrection##, and a description.
b) Set Periodicity to Weekly.
c) Set Historical Periods to 12.

d) Choose the PREPROCESSING STEPS tab.
e) Add a new algorithm by choosing the + icon on the right of the screen.
f) In the displayed dialog box, choose Outlier correction.
g) In the Outlier Detection Method field, choose Variance Test, and in the Multiplier
field, enter 1.
h) Choose Actuals Qty as the input key figure.
i) In the Save result in field, choose Delivered Qty Adjusted.
j) In the Outlier Correction Method field, choose Correction with Mean.
k) Choose Save.
Task 2: Execute the Model for Outlier Cleaning

After we have configured our outlier correction model, we need to execute the calculation.
1. Log in to the Excel UI and choose your planning view favorite.

a) Log in to Excel User Interface with the login credentials provided by the instructor.
b) Choose your favorite Mid Long term Demand Planning.
2. Run the outlier correction calculation and observe the result.

Field Value
Time Period Weekly
Forecast model to be used OutlierCorrection##
UoM to ID KG
Filter HT_0##
a) In the Advance part of the ribbon, choose Statistical Forecast → Run.
b) Set the Time Period to Weekly.
c) Set the Planning Level to Product ID and Customer ID.
d) In the Forecast model to be used field, choose OutlierCorrection##.
e) In the Unit of Measure field, choose KG.
f) Go to the Filter tab, and filter on your specific product ID HT_0##.
g) Choose Next, and choose OK to the reason code.
h) Choose the small arrow next to statistical forecast in the ribbon, and choose status.
Wait for the job to complete.
i) Refresh the data and notice that any outlier values have been adjusted.
j) Check the Business Log in the Status for a list of all outliers that have been corrected.

LESSON SUMMARY


Unit 2
Lesson 2
Cleaning Data Manually
LESSON OBJECTIVES
Historical Data Loading

You can upload your historical data into the system in different ways.
Figure 68: Load Historical Sales Data
Animation: Load Historical Sales Data

For more information on Load Historical Sales Data, please view the animation in
the lesson Cleaning Data Manually, online in the SAP Learning Hub.
Historical Data Outlier

An outlier is a value in the historical data that lies outside the accepted range of values, which
is also called the tolerance lane. There can be a variety of reasons for this deviation. For
example, a data entry error or a one-time event that affected the sales results.

Figure 70: Outlier Correction (1) with Ex-Post Method in IBP for Demand
Animation: Outlier Correction (1) with Ex-Post Method in IBP for Demand
For more information on Outlier Correction (1) with Ex-Post Method in IBP for
Demand, please view the animation in the lesson Cleaning Data Manually, online
in the SAP Learning Hub.
Historical Data Outlier Manual Correction

In SAP IBP, it is possible to correct outlier values manually, but it may not be simple because
of a large amount of data. You need to detect all the outliers and correct them. That is why
automatic correction is another option in SAP IBP.
Figure 72: Cleaning Data
Historical Data Other Updates

It is possible to consider other changes to your historical data.

Lesson: Cleaning Data Manually
Figure 73: Other Updates to Historical Data
LESSON SUMMARY


Unit 2
Learning Assessment
1. What are some of the checks that can be executed in SAP IBP on loaded sales data?
X A Checks for Outliers
X B Checks for values that are below certain threshold
X C Checks for promotion-related sales lifts
X D Checks for missing values


UNIT 3 Forecasting
Lesson 1
Using Forecast Profiles 57
Exercise 3: Use Statistical Forecasting 77
Lesson 2
Determining the Best Forecast Model 83
Exercise 4: Create a Forecast Profile Using the Best Model 85
Lesson 3
Assigning Forecast Models 91
Exercise 5: Assign Forecast Models 95
Lesson 4
Using Multiple Linear Regression 101
Lesson 5
Using Composite Forecasting 103
Exercise 6: Use a Composite Forecast 105
Lesson 6
Incorporating Market Input 109
Exercise 7: Incorporate Market Input into the Forecast 111
Lesson 7
Measuring Performance Using Alerts 115
UNIT OBJECTIVES
● Use forecast profiles

● Determine the best forecast model
● Assign a forecast model

Unit 3: Forecasting
● Understand multiple linear regression

● Use composite forecasting
● Incorporate market input into a forecast
● Use alerts to measure performance

Unit 3
Lesson 1
Using Forecast Profiles
LESSON OBJECTIVES
Statistical Forecast
Figure 74: Statistical Forecasting
Animation: Statistical Forecasting

For more information on Statistical Forecasting, please view the animation in the
lesson Using Forecast Profiles, online in the SAP Learning Hub.
This section gives some examples where statistical forecasting is typically used.

Unit 3: Forecasting
Figure 76: Typical Statistical Forecasting Process (Mid- and Long-Term Forecasting)
Animation: Typical Statistical Forecasting Process (Mid- and Long-Term

Forecasting)
For more information on Typical Statistical Forecasting Process (Mid- and Long-
Term Forecasting), please view the animation in the lesson Using Forecast
Profiles, online in the SAP Learning Hub.
From this figure we gain an overview of the different steps in statistical forecasting for the
mid- and long-term.

Lesson: Using Forecast Profiles
Figure 78: Define General Information
General parameterization information is defined on the “General” tab of the forecast model.
Figure 79: Step 1: Manage Forecast Models
Animation: Step 1: Manage Forecast Models

For more information on Step 1: Manage Forecast Models, please view the
animation in the lesson Using Forecast Profiles, online in the SAP Learning Hub.

Unit 3: Forecasting
The Manage Forecast Models app addresses preprocessing steps, forecasting steps, as well
as postprocessing steps.
Figure 81: Step 2: Gather and Cleanse Historic Data
Animation: Step 2: Gather and Cleanse Historic Data

For more information on Step 2: Gather and Cleanse Historic Data, please view
the animation in the lesson Using Forecast Profiles, online in the SAP Learning
Hub.
The historical data can be loaded into SAP IBP using the Data Integration App in the Web UI or
the CPI-DS connection between the source system and SAP IBP.

Figure 83: Step 3: Run Statistical Forecasting via the Excel Add-In
Animation: Step 3: Run Statistical Forecasting via the Excel Add-In

For more information on Step 3: Run Statistical Forecasting via the Excel Add-In,
please view the animation in the lesson Using Forecast Profiles, online in the SAP
Learning Hub.
Forecast may be run from Excel UI for a selection of data or the entire data-set. A job will be
created, similarly as can be seen in the figure. Detailed logs may be available by enabling a
Global setting. Short logs are available as a default.
Figure 85: Step 4: Solve Alerts and Adjust Statistical Forecast

Unit 3: Forecasting
Animation: Step 4: Solve Alerts and Adjust Statistical Forecast

For more information on Step 4: Solve Alerts and Adjust Statistical Forecast,
Learning Hub.
You can monitor statistical forecasting alerts in the Monitor Alerts app and resolve the issues
by adjusting the mid- to long-term forecast.
Overview of Forecast Models
Figure 87: Forecasting Models in IBP for Demand
Various different algorithms clustered in the areas of pre-processing, time series, and
regression-based, support you in IBP for Demand.
Figure 88: Forecast Models
A forecast model creates the forecast based on input data, algorithms and parameterization.
Get an overview of the SAP IBP Demand Planning algorithms for forecasting.

Figure 89: Simple Moving Average
Animation: Simple Moving Average

For more information on Simple Moving Average, please view the animation in
the lesson Using Forecast Profiles, online in the SAP Learning Hub.
The simple moving average algorithm calculates the average of time series values measured
in consecutive subsets of time periods.
Figure 91: Single Exponential Smoothing
Animation: Single Exponential Smoothing

For more information on Single Exponential Smoothing, please view the

Unit 3: Forecasting
The single exponential smoothing algorithm can be used to model a time series that has no
trend or seasonality in it.
Figure 93: Double Exponential Smoothing
Animation: Double Exponential Smoothing

For more information on Double Exponential Smoothing, please view the
The double exponential smoothing algorithm can be used to model a time series with a trend
but no seasonality in it.
Figure 95: Triple Exponential Smoothing

Animation: Triple Exponential Smoothing

For more information on Triple Exponential Smoothing, please view the
The triple exponential smoothing algorithm can be used to model a time series that has both
trend and seasonality in it.
Figure 97: Triple Exponential Smoothing - Additive Seasonality
If required, you can add a constant seasonality pattern to the time series.
Figure 98: Triple Exponential Smoothing - Multiplicative Seasonality
If required, you can multiply a constant seasonality pattern to the time series.

Unit 3: Forecasting
Figure 99: Simple Average
Animation: Simple Average

For more information on Simple Average, please view the animation in the lesson
Using Forecast Profiles, online in the SAP Learning Hub.
The simple average algorithm calculates the average of all historical data and uses it as a
forecast for the future.
Figure 101: Weighted Average
Animation: Weighted Average

For more information on Weighted Average, please view the animation in the
The weighted average algorithm multiplies each historical key figure value by a predefined
weight and divides the sum of these multiplied values by the sum of the weights. The forecast
is then a weighted average.

Figure 103: Weighted Moving Average
Animation: Weighted Moving Average

For more information on Weighted Moving Average, please view the animation in
the lesson Using Forecast Profiles, online in the SAP Learning Hub.
The weighted moving average algorithm can smooth time series data while giving more
significance to certain time periods.
Figure 105: Adaptive Response Rate Single Exponential Smoothing

Unit 3: Forecasting
Animation: Adaptive Response Rate Single Exponential Smoothing

For more information on Adaptive Response Rate Single Exponential Smoothing,
Learning Hub.
The adaptive response rate single exponential smoothing algorithm is comparable to the
single exponential smoothing algorithm except that the alpha coefficient is continuously
recalculated.
Figure 107: Automated Exponential Smoothing
Animation: Automated Exponential Smoothing

For more information on Automated Exponential Smoothing, please view the
The automated exponential smoothing algorithm allows the system to automatically select
the most suitable exponential smoothing algorithm and coefficients for the forecast.

Figure 109: Croston Method
Animation: Croston Method

For more information on Croston Method, please view the animation in the
The Croston method algorithm can be used for products with intermittent demand, causing a
large number of zero values in the time series.
Figure 111: Multi Linear Regression (MLR) (1)

Unit 3: Forecasting
Animation: Multi Linear Regression (MLR) (1)

For more information on Multi Linear Regression (MLR) (1), please view the
The multi linear regression algorithm is used to model the linear relationship between a
dependent variable and one or more independent variables.
Figure 113: Multi Linear Regression (MLR) (2)
Multi linear regression can be combined with outlier correction or missing value substitution.
Brown’s Linear Exponential Smoothing Algorithm

This algorithm is similar to the double exponential smoothing insofar as it lessens the effects
of trends on the forecasts. However, Brown’s linear exponential smoothing uses the same
alpha coefficient to smooth both the level and the trend in the historical data. The algorithm
performs the following steps:
1. Calculates the differences between the single exponential smoothed values and the
doubly smoothed values.
2. Adds the differences to the single smoothed values.
3. Estimates level values and trend values based on the smoothed historical values, and adds
the estimates up for each time period.
The resulting forecast responds to changes in the trend more rapidly than a forecast
calculated by using the double exponential smoothing algorithm.

Figure 114: Brown’s Linear Exponential Smoothing Algorithm
Brown’s Linear Exponential Smoothing algorithm is a forecast algorithm that is suitable for
forecasting a time series that contains a trend. In this regard, it can be viewed as an
alternative to the double exponential smoothing algorithm.
It uses only one smoothing parameter, the alpha, but the algorithm executes the smoothing
twice to get an estimate of the level and the trend. The resulting forecast responses to
changes in the trend more rapidly than a forecast calculated by the double exponential
smoothing algorithm would and is less sensitive to the initialization of the model.
It has an adaptive variation in which the main smoothing coefficient, alpha, is changing from
period to period during training as it adapts to new data points.
There is no trend damping option for Brown’s Linear Exponential Smoothing algorithm.
There are no additional details provided in the forecasting log regarding Brown’s linear
exponential smoothing algorithm, only the computed error metrics are shown.
Auto-ARIMA/SARIMA Algorithms
The automated AutoRegressive Integrated Moving Average (auto-ARIMA) algorithm
combines auto-regression and moving average techniques to provide reliable forecasts after
calculating the optimal values for certain parameters automatically and differencing the
historical data to make it stationary if needed. It is useful for the high-level automation of
forecasting jobs that are characterized by the following:
● Forecasts are calculated for the near future.

● Products typically have long lifecycles.
● Considerable sales history is available.
● Sudden changes in trends require automatic and rapid adjustments of the forecast OR
there are no noticeable long-term correlations between the historical data points.
● There are no noticeable dependencies between the historical sales and other variables OR
data on other demand influencing variables is not available.

Unit 3: Forecasting
Figure 115: Auto-ARIMA/SARIMA Algorithm
ARIMA is an acronym: AR – I – MA and it stands for Auto-Regressive Integrated Moving

Average algorithm.
For each part that forms this powerful and complex algorithm, there is a certain parameter
describing that component:
● p – for AR (auto-regressive) component
● q – for the MA (moving average) component
● d – for the I (integrated) component
The ARIMA algorithm is suitable to be used for analyzing and forecasting various time series,
but different models are used for different times series depending on the properties of the
time series, for example, whether it has a trend or not, whether it has short or long memory,
and so on.
An ARIMA model is a certain parameterized ARIMA algorithm that describes what values
should be used for the p, d, q parameters and it is noted as ARIMA(p,d,q) triplet. For example,
ARIMA(2,1,0).
The parameters are non-negative integers, usually small values below 5.
The AR component expresses how many previous values influence a certain value of the time
series. As opposed to exponential smoothing where all previous values are used with decaying
weights (going backwards) for predicting the next value, in ARIMA only a certain number of
periods, p, are used to influence the next predication by applying auto-regression with as
many lags.
The MA component is used to estimate the regression error as a moving average of previous
regression errors. So, if q = 3, that means that a moving average of three periods is used to
estimate the error term based on previous regressions during the training phase.
The Integrated component is used to make the time series stationary, only then the AR and
MA components (also called ARMA models) can be estimated and a prediction made.
A time series is stationary when its mean and standard deviation does not change over time.
For example, if a time series contains a trend, it means that it is not stationary. By differencing
it (subtracting neighboring time series values from each other, a new time series is obtained
that may be stationary). The differencing techniques are repeated multiple times (d) until a
stationary time series is obtained.
SARIMA Algorithm

SARIMA is a variation of ARIMA that caters for seasonality. It is often called, “Seasonal
ARIMA”.
It has the original set of parameters, plus additional ones for seasonal regressions.
ARIMA Parameters Additional SARIMA Parameters
p – for the AR (auto-regressive) component P – for the seasonal AR component

q – for the MA (moving average) component Q – for the seasonal MA component
d – for the integrated component D – for the seasonal differencing
m – for the length of the seasonal cycle
A ARIMA model is described using the notation ARIMA(p,d,q,P,D,Q)m.

For example: ARIMA(2,1,0,0,1,0)12. In this case, p = 2, d = 1, q = 0, P = 0, D = 1, Q = 0, and the
length of the seasonal cycle is 12 periods.
Using ARIMA for prediction requires a lot of expert knowledge and entails the analysis of the
time series especially analysis of the auto-correlation (AFC) and the partial auto-correlation
(PACF) functions and various other plots, especially on residuals, to determine the most
appropriate ARIMA model to be used to create the prediction.
IBP offers an automated version of the ARIMA and SARIMA implementation where the system
internally does various tests to determine how many times the input time series needs to be
differenced to come to a stationary time series (parameters d and D), also determines the
optimal orders for the AR and MA components (p, P, q, Q) automatically by minimizing a
certain criterion.
If seasonal items are to be forecasted, the seasonality needs to be enabled for auto-ARIMA/
SARIMA, in which case, it can automatically check for seasonality by using a seasonality test
and can determine automatically the length of the seasonality cycle if not provided.
The optimal model during the ARIMA execution in IBP can be determined by minimizing a
certain information criterion: AIC, AICc, or BIC.
Figure 116: Execute Statistical Forecasts in the Excel Add-in
Gradient Boosting
Gradient boosting of decision trees (shortened here as gradient boosting) is an ensemble
machine learning algorithm for regression and classification problems. It is useful in demand

Unit 3: Forecasting
planning when several external conditions are to be considered during the forecast
calculation (the average temperature during certain time periods, the price, and so on).
Gradient boosting is similar to other regression models in that it considers independent
variables to explain a target variable such as sales history and calculates a forecast based on
the results. However, as an ensemble method for regression it performs repeated
optimization on several decision trees, each of which is a tree-like model of decisions and
their possible consequences. The goal of this tree-building process is to create a tree that
determines which independent variables should be considered at which level of the tree from
what threshold during the forecast calculations. The individual trees are thus combined into
an ensemble model to achieve overall better accuracy than a single decision tree.
For example, while building a decision tree, the algorithm may conclude that out of the values
of the average monthly temperature, 20°C has the largest influence on the sales values. This
is one split in the tree. If the algorithm finds that average monthly temperature is to be
considered before another independent variable such as the price of the product, this priority
is also reflected in the tree. Once these splits are determined and the decision tree is
constructed, the algorithm can use it to determine future outcomes for given inputs.
The following graphic shows a part of a decision tree that could be used for demand planning:
Figure 117: Decision Tree
The following chart shows an example of the input and results of a gradient boosting process
in which the average temperature is considered as an independent variable:

Copy Past Periods

Copy Past Periods is a very basic algorithm that is useful when the sales history is repetitive
and the demand is easily forecastable. For example, you may want to copy past periods when
the monthly sales data is expected to be similar from one year to the other.
The algorithm also allows you to assess the efficiency of more complex forecasting
algorithms by comparing their accuracy to the accuracy of a simple algorithm like this.
Calculation of the Forecast
The algorithm calculates the forecast by copying the selected number of the most recent data
points from the sales history to the future horizon. If the forecast horizon is longer than X, the
remaining periods are filled with the same set of values in a repeated manner.
For example, if the current month is July, there are six periods in the past, and you choose to
copy the most recent three periods, the algorithm copies those three values to every
subsequent set of three periods in the future. This is illustrated by the following table:
You can also decide that the system should copy an increased or decreased version of the
historical data. For this purpose, you can specify a percentage adjustment for the algorithm
that should be applied to all historical values. For example, if you set the percentage
adjustment to 120, the system will calculate the 120% of each value and copy the results to
future periods.
Before the copying, missing historical values are substituted as specified in the preprocessing
steps of the forecast model or defined by the MIN_FORECAST global configuration
parameter.
Calculation of the Ex-Post Forecast
For the ex-post forecast, the number of periods that should be copied is used by the system
as it was a lag. This means the following:
● For the first set of the selected number of historical periods, the ex-post forecast can’t be
calculated as there’s no data to copy.
● For the other historical periods, the ex-post forecast is equal to the actual sales obtained
the selected number of periods before.
For example, if the current month is July, there are six periods in the past, and you choose to
copy the most recent three periods, the algorithm doesn't calculate an ex-post forecast for
the first three periods. Instead, it copies the sales history values from January to April, from
February to May, and from March to June, and uses these copied values as the ex-post
forecast. This is illustrated by the following table:

Unit 3: Forecasting

Unit 3
Exercise 3
Use Statistical Forecasting
Simulation: Use Statistical Forecasting

For more information on Use Statistical Forecasting, please view the simulation
in the lesson Using Forecast Profiles online in the SAP Learning Hub.
You need to create a statistical forecast profile.
1. Create a three week moving average forecast profile, called SimpleMovingAvg## using
the data in the following table.
Table 2:
Field Value
General
Model Name SimpleMovingAvg##
Description Simple Moving Average GR##
Periodicity Weekly
Forecast Periods 12
Forecasting Steps
Main Input for Forecasting Steps Delivered Qty Adjusted
Target Key Figure for Forecast Statistical Forecast Qty
Target Key Figure for Ex-Post Forecast Expost Forecast Qty
Algorithms
Simple Moving Average
Number of Periods 3
Extended Calculation to Future Periods Selected
Post-processing Steps
Mean Absolute Percentage Error Selected

(MAPE)
Target Key Figure for MAPE Mode Fit Error: MAPE
Mean Absolute Scaled Error (MASE) Selected

Unit 3: Forecasting
Field Value
Target Key Figure for MASE Model Fit: MASE
2. Try out your forecast profile in your demand planning favorite for your HT_0## Product ID
at the Product ID, Location ID, and Customer ID level.
3. Refresh your planning view to see the results of the forecasting run.
4. Check the values of MAPE and MASE in the business log.
5. Execute your Forecast Profile in your Demand Planning favorite for all of your Product IDs
ending in your ## at the Product ID, Location ID, and Customer ID level.

Unit 3
Solution 3
Use Statistical Forecasting
Simulation: Use Statistical Forecasting

For more information on Use Statistical Forecasting, please view the simulation
in the lesson Using Forecast Profiles online in the SAP Learning Hub.
You need to create a statistical forecast profile.
1. Create a three week moving average forecast profile, called SimpleMovingAvg## using
the data in the following table.
Table 2:
Field Value
General
Model Name SimpleMovingAvg##
Description Simple Moving Average GR##
Periodicity Weekly
Forecast Periods 12
Forecasting Steps
Main Input for Forecasting Steps Delivered Qty Adjusted
Target Key Figure for Forecast Statistical Forecast Qty
Target Key Figure for Ex-Post Forecast Expost Forecast Qty
Algorithms
Simple Moving Average
Number of Periods 3
Extended Calculation to Future Periods Selected
Post-processing Steps
Mean Absolute Percentage Error Selected

(MAPE)
Target Key Figure for MAPE Mode Fit Error: MAPE
Mean Absolute Scaled Error (MASE) Selected

Unit 3: Forecasting
Field Value
Target Key Figure for MASE Model Fit: MASE
a) In the Web UI, in the Demand Planner group, choose the Manage Forecast Models tile.
b) Choose Create in the lower right of the screen and choose planning area ZSAP6 in the
dialog box that appears.
c) Enter the data from the table on the appropriate tabs and choose Save.
2. Try out your forecast profile in your demand planning favorite for your HT_0## Product ID
at the Product ID, Location ID, and Customer ID level.
a) In the Microsoft Excel UI, choose Favorites → Demand Planning.
b) In the Application Jobs section, choose Run → Statistical Forecasting.
c) Ensure that the Product ID, Location ID, and Customer ID attributes are selected.
d) Choose a time period of Weekly.
e) Select your SimpleMovingAvg## forecast profile.
f) Choose UOM To ID KG and the Base Version.
g) Select the Filter tab and select the attribute Product ID and value HT_0##.
h) Choose Next and Run (the Reason Code and Comment are optional).
i) You can check the planning run by choosing the Status → Statistical Forecasting
option.
j) When the status shows completed, go to the next exercise step.
a) In the Data Input section, choose the Refresh icon.
b) Observe the update of the Statistical Forecast Qty key figure values in future weeks.
c) Set both the Delivered Qty Adjusted and Statistical Forecast Qty key figures to be lines
in the chart and ensure that you are displaying at least three periods in the past.
d) Observe that the forecast does not immediately start as a constant, but only future
periods are constant. This is due to the Extend Calculation to Future Periods indicator
being set in the forecast profile.

a) In the Excel UI, in the Application Jobs section, choose Status → Statistical
Forecasting.
b) Locate your planning run and choose Show Business Log.
c) You do not need to filter the list, just choose OK.

What was the MAPE value for each Product, Location, Customer combination?
What was the MASE value for each Product, Location, Customer combination?
5. Execute your Forecast Profile in your Demand Planning favorite for all of your Product IDs
ending in your ## at the Product ID, Location ID, and Customer ID level.

a) In the Excel UI, choose Favorites → Demand Planning.
b) In the Application Jobs section, choose Run → Statistical Forecasting.
c) Ensure that the Product ID, Location ID, and Customer ID attributes are selected.
d) Choose a Time Period of Weekly.
e) Select your SimpleMovingAvg## forecast profile.
f) Choose UOM To ID KG and the Base Version.
g) Select the Filter tab and select your Prod ## filter.
i) You can check the planning run by choosing the Status → Statistical Forecasting
option.
j) When the status shows completed, go to the next exercise step.
b) Observe the update of the Statistical Forecast Qty key figure values in future weeks for
all three of your Product, Location, Customer combinations.

a) In the Excel UI, in the Application Jobs section, choose Status → Statistical
Forecasting.

What was the MAPE value for each Product, Location, Customer combination?
What was the MASE value for each Product, Location, Customer combination?

Unit 3: Forecasting
LESSON SUMMARY

Unit 3
Lesson 2
Determining the Best Forecast Model
LESSON OBJECTIVES
Multiple Forecast Algorithm Usage

You can add more than one forecasting algorithm to a forecast model, but you need to specify
how the system should utilize the selected algorithms.
Figure 119: Using Multiple Forecast Algorithms
You can choose the following method:

● Choose Best Forecast: If you choose this method and select an error measure in the
Measure Used for Forecast Comparison field, the system compares the sales history with
the ex-post forecasts based on the selected error measure to determine the algorithm that
yields the most accurate results.
Figure 120: Choose Best Forecast
If you specify a number in the Test Phase Periods field after selecting the Choose Best
Forecast method, you split the forecasting process into the following phases:

Unit 3: Forecasting
- Test Phase: In this phase, the system divides the historical data into a training data set
and a test data set. It uses the training data set to calculate the forecast with each
algorithm in the forecast model, and compares the results with the test data set to
choose the algorithm that calculates the best forecast.
- Forecasting Phase: In this phase, the system uses the algorithm with the best forecast
to calculate the forecast again, this time leveraging all data in the historical horizon. The
final results of this phase are saved in the target key figure.
● Calculate Weighted Average Forecast: If you choose this method, you can assign weights
to the forecasting algorithms you have added to the model. The system calculates the
average forecast after multiplying each result by the weight assigned to the algorithm that
was used for its calculation. Sliders make the relative weights of individual algorithms
more transparent.
Figure 121: Choose the Calculate Weighted Average Forecast
Apart from the best forecast or calculate weighted average forecast, you can also save the
results calculated by the individual algorithms. For this, you need to specify a target key figure
for each relevant algorithm separately.

Unit 3
Exercise 4
Create a Forecast Profile Using the Best Model
Simulation: Create a Forecast Profile Using the Best Model

For more information on Create a Forecast Profile Using the Best Model, please
view the simulation in the lesson Determining the Best Forecast Model online in
the SAP Learning Hub.
We need to create a good and robust statistical forecast that we use for automatically
creating our forecast projections. IBP for Demand offers a variety of different statistical
forecast algorithms. We create one profile with different forecast models and let the system
choose the best model.
Task 1: Create a Forecast Profile and Add Three Forecasting Algorithms
1. Create a new forecast profile called PickBestModel## that picks the best of three
different algorithms using the information from the following table.
Field Value
Model Name PickBestModel##
Description Pick Best Model ##
Periodicity Weekly
Forecast Periods 28
2. Add forecasting step information for Single Exponential Smoothing, Automated

Exponential Smoothing and Simple Average Algorithms. Use MAPE in the post-processing
step.
Field Value
Scope of Optimizaiton Smoothing Algorithm with Best Re-
sults
Measure Used for Optimization MAPE
Periods in a Season 12
Limit for Alpha 0.2 – 0.6
Limit for Beta 0.2 – 0.6
Limit for Gamma 0.2 – 0.6

Unit 3: Forecasting
Field Value
Method Choose Best Forecast
Measure Used for Forecast Comparison MAPE
Test Phase Periods 3
Task 2: Task 2: Execute Statistical Forecasting in the Excel UI

The Excel UI is used to execute the statistical forecast. In this exercise, we run the statistical
forecast and view the results.
1. Run your PickBestModel## statistical model in your Demand Planning favorite for all of
your Product IDs ending in your ## at the Product ID, Location ID, Customer ID level and
view the results.
Field Value
Time Period Weekly
Planning Level Product ID, Location ID, Customer

ID
Forecast model to be used PickBestModel##
UoM to ID KG
Filter Product ID = HT_0##, HT_1##,

HT_2##
Versions Base Version
Filter Prod ##
2. Determine which algorithms were selected for each Product, Location, Customer
combination.

Unit 3
Solution 4
Create a Forecast Profile Using the Best Model
Simulation: Create a Forecast Profile Using the Best Model

For more information on Create a Forecast Profile Using the Best Model, please
view the simulation in the lesson Determining the Best Forecast Model online in
We need to create a good and robust statistical forecast that we use for automatically
creating our forecast projections. IBP for Demand offers a variety of different statistical
forecast algorithms. We create one profile with different forecast models and let the system
choose the best model.
Task 1: Create a Forecast Profile and Add Three Forecasting Algorithms
1. Create a new forecast profile called PickBestModel## that picks the best of three
different algorithms using the information from the following table.
Field Value
Model Name PickBestModel##
Description Pick Best Model ##
Periodicity Weekly
Forecast Periods 28
a) Choose the Manage Forecast Models app.
b) Choose Create, and choose the planning area ZSAP6.
c) Enter the model name PickBestModel##.
d) Set the periodicity is to Weekly if not already set.
e) Set the Historical periods value to 28, if not already set.
f) Set the Forecast periods values to 28, if not already set.
2. Add forecasting step information for Single Exponential Smoothing, Automated

Exponential Smoothing and Simple Average Algorithms. Use MAPE in the post-processing
step.
Field Value
Scope of Optimizaiton Smoothing Algorithm with Best Re-
sults

Unit 3: Forecasting
Field Value
Measure Used for Optimization MAPE
Periods in a Season 12
Limit for Alpha 0.2 – 0.6
Limit for Beta 0.2 – 0.6
Limit for Gamma 0.2 – 0.6
Field Value
Method Choose Best Forecast
Measure Used for Forecast Comparison MAPE
Test Phase Periods 3
a) Choose the FORECASTING STEPS tab.
b) Set the main input key figure to Delivered Qty Adjusted, and the Target key
figure to Statistical Forecast Qty.
c) In the Target Key Figure for Ex-Post Forecast, choose Expost Forecast Qty.
d) Choose the + sign to add the Single Exponential Smoothing algorithm.
e) Choose the + sign to add the Automated Exponential Smoothing algorithm with the
settings in the first table provided.
f) Choose the + sign to add the Simple Average algorithm. You do not need to maintain
any further settings for this algorithm.
g) In the Utilize Multiple Forecasts section, choose the values given in the second table
provided.
h) Go to the POSTPROCESSING STEPS tab.
i) Choose the target key figure for MAPE: Model Fit Error: MAPE.
j) Choose Save.
Task 2: Task 2: Execute Statistical Forecasting in the Excel UI

1. Run your PickBestModel## statistical model in your Demand Planning favorite for all of
your Product IDs ending in your ## at the Product ID, Location ID, Customer ID level and
view the results.
Field Value
Time Period Weekly
Planning Level Product ID, Location ID, Customer

ID

Lesson: Determining the Best Forecast Model
Field Value
UoM to ID KG
Filter Product ID = HT_0##, HT_1##,

HT_2##
Filter Prod ##
a) In the Application Jobs part of the ribbon, choose Statistical Forecast and choose Run.
b) Set the Time Period to Weekly.
c) Set the Planning Level to Product ID, Location ID, and Customer ID.
d) In the Forecast model to be used field, choose the PickBestModel##, just created.
e) Choose the Base Version and set KG for the UOM To ID value.
f) Choose the Filter tab and choose your Prod ## filter.
g) Choose Next.
h) Choose Run (the Reason Code and Comment are optional).
i) Check the status of your job by choosing Status → Statistical Forecasting.
j) Follow the status of the execution of the forecasting job in the log. Wait until it
completes.
k) Choose Refresh in the Data Input subsection and view the forecast in the Excel UI.
2. Determine which algorithms were selected for each Product, Location, Customer
combination.
a) Choose Status → Statistical Forecasting in the Application Jobs subsection.
b) Locate your forecasting job in the list and choose Show Business Log.
c) Observe the results provided by the system and see how the system chose the model.
An analysis of the business log shows the values in the test phase and how each
algorithm was selected.
d) For each Product ID, Location ID, and Customer ID combination, list the forecast
algorithm that was used along with the MAPE.

Unit 3: Forecasting
LESSON SUMMARY

Unit 3
Lesson 3
Assigning Forecast Models
LESSON OBJECTIVES
Assign Forecast Models App

The Assign Forecast Models app allows you to specify which forecast model is to be used for
calculating the mid- or long-term forecast for the planning objects (combinations of master
data characteristics) that exist at a selected planning level within a selected planning area.
The assignment of forecast models is an optional step that you can take before starting a
simulation or running statistical forecasting in the background by defining a job in the IBP
Excel add-in. If you have forecast models assigned to the available planning objects, you can
select the option Consider Forecast Model Assignments in the add-in, thus making sure that
the forecast calculated for each planning object is based on the forecast model assigned to
that specific planning object. If you have no forecast models assigned, you can only select one
forecast model for the entire planning view.
You can assign the same forecast model to as many planning objects as you wish, and the
assignment process is facilitated by direct navigation to the respective models in the Manage
Forecast Models app.
Figure 123: Assign Forecast Models App – Settings
Prerequisites for forecasting with assigned models:

● The intended level on which one desires to assign forecast models is modelled as a
planning level of the planning area. This level must be time dependent.
● The planning object must exist on the intended planning level where the forecast model
assignments are maintained.
● The forecast models need to be created before they can be assigned.

Unit 3: Forecasting
Figure 124: Prerequisites for Forecasting
It is possible to use the model assignments performed in the Assign Forecast Model app in the
Web-UI in the execution of the statistical forecast models in Excel as shown in the following
figure.
Figure 125: Using Model Assignments in Excel When Executing the Statistical Forecast Models
If the same planning level is used, you get the option to choose Consider Forecast Model
Assignments.
The following two figures show how to do simulations with the assigned forecast models.
Figure 126: Simulate with Assigned Forecast Models (1 of 2)

Lesson: Assigning Forecast Models
Figure 127: Simulate with Assigned Forecast Models (2 of 2)

Unit 3: Forecasting

Unit 3
Exercise 5
Assign Forecast Models
Simulation: Assign Forecast Models

For more information on Assign Forecast Models, please view the simulation in
the lesson Assigning Forecast Models online in the SAP Learning Hub.
We need to make an assignment for planning combinations because we want to execute

some specified forecast models for them.
Task 1: Assign Forecast Models to Planning Combinations
1. Assign the newly created statistical PickBestModel## forecast model to your planning
combinations and explore the use of the filtering possibilities in the app.
Master Data Value
Customer ID EMEA200
Location ID HD_DC_FR
Product ID HT_0##
Assigned Forecast Model PickBestModel##
Task 2: Execute Statistical Forecasting in Excel UI

1. Before we can use the Product Lifecycle Assignments, we need to ensure the forecast
model we are using will take them into consideration. Change your PickBestModel##
forecast model to Consider Product Lifecycle Information.
2. Run the statistical forecast using the PickBestModel## for all of the Product IDs ending in
your ## and be sure to select Consider Forecast Model Assignments at the Product ID,
Customer ID, Location ID level.
Field Value
Time Period Weekly
Planning Level Product ID, Customer ID, Location

ID
Consider Forecast Model Assignment Selected

Planning Level for Assignments Location | Product | Customer |
Calendar Weekly

Unit 3: Forecasting
Field Value
UoM to ID KG
Filter Prod ##
3. Analyze the business log to see how the forecast was executed and which forecast
algorithms were used.

Unit 3
Solution 5
Assign Forecast Models
Simulation: Assign Forecast Models

For more information on Assign Forecast Models, please view the simulation in
the lesson Assigning Forecast Models online in the SAP Learning Hub.
We need to make an assignment for planning combinations because we want to execute

some specified forecast models for them.
Task 1: Assign Forecast Models to Planning Combinations
1. Assign the newly created statistical PickBestModel## forecast model to your planning
combinations and explore the use of the filtering possibilities in the app.
Master Data Value
Customer ID EMEA200
Location ID HD_DC_FR
Product ID HT_0##
Assigned Forecast Model PickBestModel##
a) In the SAP Fiori launchpad, in the Demand Planner group, choose the Assign Forecast
Models tile.
b) Choose planning area ZSAP6 and planning level LOCPRODCUSTCALWEEKLY.
c) Choose Save.
d) In the filter at the top, enter all three of your Product IDs, HT_0##, HT_1##, and
HT_2## and choose Go.
e) Select all of the Product ID, Location ID, and Customer ID items in the list.
f) Choose Edit Assignment.
g) Choose the PickBestModel## forecast model and choose Assign.
h) Approve the six planning objects that will be edited if the dialog box appears. The
forecast model is now assigned to each of the selected planning objects.
Task 2: Execute Statistical Forecasting in Excel UI


Unit 3: Forecasting
1. Before we can use the Product Lifecycle Assignments, we need to ensure the forecast
model we are using will take them into consideration. Change your PickBestModel##
forecast model to Consider Product Lifecycle Information.
a) In the SAP Fiori launchpad, in the Demand Planner group, choose the Manage Forecast
Models tile.
b) Select your PickBestModel## and choose Edit.
c) On the General tab, choose the Consider Product Lifecycle Information indicator and
Save.
2. Run the statistical forecast using the PickBestModel## for all of the Product IDs ending in
your ## and be sure to select Consider Forecast Model Assignments at the Product ID,
Customer ID, Location ID level.
Field Value
Time Period Weekly
Planning Level Product ID, Customer ID, Location

ID
Consider Forecast Model Assignment Selected

Planning Level for Assignments Location | Product | Customer |
Calendar Weekly
UoM to ID KG
Filter Prod ##
a) In the Excel UI, in the Application Jobs part of the ribbon, choose Run → Statistical
Forecast.
b) Set the Time period to Weekly.
c) Set the Planning Level to Product ID, Customer ID, and Location ID.
d) Select Consider Forecast Model Assignment and choose the Planning Level for
Assignments: Location | Product | Customer | Calendar Weekly.
e) For Forecast model to be used, choose the PickBestModel## model previously

created.
f) Choose the filter tab and assign your Prod ## filter.
g) Choose Next.
h) Choose Run (the Reason Code and Comment are optional).
3. Analyze the business log to see how the forecast was executed and which forecast
algorithms were used.
a) Choose Status → Statistical Forecasting in the Application Jobs subsection.

Lesson: Assigning Forecast Models
b) Follow the status of the execution of the forecasting job in the log. Wait until it
completes.
c) Choose Show Business Log.
d) Analyze the log to see how the system calculated the forecast.
e) Choose Refresh in Data Input subsection and view the forecast in the Excel UI.
f) Identify the products for which the PickBestModel## was executed.
g) Identify the Forecast profile that was used on the rest of the products.

Unit 3: Forecasting
LESSON SUMMARY

Unit 3
Lesson 4
Using Multiple Linear Regression
LESSON OBJECTIVES
Multiple Linear Regression (MLR)

MLR Overview
As the demand planner, you need to consider other methods of forecasting that might be
more effective in certain situations. Causal analysis can be used in situations where you have
independent variables, such as price, that have some influence on a dependent variable, such
as sales quantity. You want to use this functional context so that you can set the system to
make sales react in a certain way when you change the price for the future.
Causal analysis is based on causal factors, such as prices, budgets, and campaigns. The
system uses Multiple Linear Regression (MLR) to calculate the influence of causal factors on
past sales. In this way, the system allows you to analyze the success of specific actions. The
calculated connection between causal factors and past sales is then used as a basis for
modeling future actions.
● You use MLR to determine how a dependent variable, such as sales, is connected with
independent variables called casual variables, such as prices, advertising, and seasonal
factors.
● MLR uses historical data as a basis for calculating the regression coefficients (beta) for
causal analysis.
Linear Regression Approach

Linear regression is an approach to modeling the linear relationship between a dependent
variable and one or more independent variables such as price, temperature, or GDP. The
forecast depends on the future values of these independent variables, which are known or can
be estimated. Note that there must be no interdependency (collinearity) between the
independent variables. The forecast is calculated using linear functions, and unknown model
parameters are estimated from the data.
In the demand application, linear regression is useful when various external conditions are to
be considered during the forecast calculation (for example, the average temperature during
certain time periods). The system looks for coefficients to multiply the independent variables
with, thus getting results that are as close to the historical values as possible. This way it can
predict the future values of the independent variables and calculate a forecast for the future
that takes these variables into consideration.

Unit 3: Forecasting
Figure 129: Linear Regression Modeling
Options in Configuration of MLR

In IBP you can define how the system is to choose the independent variables that have a
significant influence on the forecast. In configuration of MLR, you have the following options:
● None
The system considers all independent variables for the forecast.
● Forward Selection
The system starts with one independent variable, then add the others one by one until it
identifies all factors that are relevant for the forecast.
● Backward Selection
The system takes all independent variables into consideration at the beginning of the
forecast calculation and one by one excludes all factors that are irrelevant for the forecast.
Independent Variables
These are the key figures to be considered by the algorithm as external factors when it
calculates the forecast. Note that the number of historical periods must be two more than the
number of independent variables.
Slope Dummy
The algorithm can consider the effects of trends on the forecast even when those trends
cannot be explained by any known independent variables.
The slope dummy is a system-generated independent variable. The values of this variable
increase by one from one period to another so they form a 45-degree slope in a chart in which
the X-axis contains the time periods, the Y-axis contains time series values for the input key
figure, and the intercept is always zero. The algorithm multiplies the values of the slope
dummy variable with a regression coefficient, which is calculated in a way that the modified
values are as close to the historical values as possible. This allows the system to predict trend
values for the future and calculate a forecast that takes the trend into consideration.
LESSON SUMMARY

Unit 3
Lesson 5
Using Composite Forecasting
LESSON OBJECTIVES
Composite Forecasting
Demand Planning takes the past sales data, such as invoiced sales quantities or sales
revenue, and uses forecasts to update it for the future. To do this, it can use statistical
forecasting techniques, such as the constant, trend, and seasonal models with exponential
smoothing or linear regression.
The complexity and competitive nature of today's business environment requires
organizations to consider many variables when developing a sales and operations plan:
● Multiple sources of demand plan data. For example, the manufacturer's forecast is based
on a distributor's past sales and point of sales directly from the retailer.
● Factors influencing demand. For example, the size of the sales force, advertising
expenditures, price, promotions, and seasonality.
● Demand plan data can be exchanged with sales organizations, customers, and suppliers.
● Collaborative planning involves comparing your own forecast results with the ones of your
customers. Composite forecasting involves combining several forecasting techniques to
provide the forecast results.
Composite forecasting goes beyond the idea of pick-the-best and combines two or more
different methods to get the final forecast for the short- and mid-term horizons.
It is possible to use weighted average between two or more different forecast algorithms in
one forecast model to define the best final forecast model.
Calculate Weighted Average Forecast: If you choose this method, you can assign weights to
the forecasting algorithms you have added to the model. The system calculates the average
forecast after multiplying each result by the weight assigned to the algorithm that was used
for its calculation. Sliders make the relative weights of individual algorithms more
transparent.
Figure 130: Calculated Weighted Average Forecast

Unit 3: Forecasting
It is also possible to let the system run an automatic forecast execution. To do this, you have
to create an application job and assign two or more different forecast models. In this case,
forecast models must use different planning horizons in the configuration.
For example: The first model uses the single exponential smoothing and double exponential
smoothing algorithms for the horizon between Week1 and Week12 with MAPE as forecast
error measure, and the second model uses the weighted average algorithm for the horizon
between Week13 and Week52 with MAPE as forecast error measure.

Unit 3
Exercise 6
Use a Composite Forecast
Simulation: Use a Composite Forecast

For more information on Use a Composite Forecast, please view the simulation in
the lesson Using Composite Forecasting online in the SAP Learning Hub.
We need to create a composite forecast that uses the strength of each algorithm.
1. Create a composite forecast profile called CompFcst## by copying your existing

PickBestModel## profile.
2. Change your CompFcst## profile by making the appropriate adjustments to use the
simple average 60% and each of the other algorithms 20%.
3. Try out your forecast profile in your Demand Planning favorite for your HT_0## Product
ID at the Product ID, Location ID, and Customer ID level.
5. Check for any MAPE alerts in the Monitor Custom Alerts tile.

Unit 3
Solution 6
Use a Composite Forecast
Simulation: Use a Composite Forecast

For more information on Use a Composite Forecast, please view the simulation in
the lesson Using Composite Forecasting online in the SAP Learning Hub.
We need to create a composite forecast that uses the strength of each algorithm.
1. Create a composite forecast profile called CompFcst## by copying your existing

PickBestModel## profile.
b) Select your PickBestModel## profile and choose Copy in the upper right of the
screen.
c) Enter the name CompFcst## and choose OK.
2. Change your CompFcst## profile by making the appropriate adjustments to use the
simple average 60% and each of the other algorithms 20%.
b) Select your CompFcst## profile and choose Edit in the lower right of the screen.
c) On the General tab, enter CompFcst## as the description.
d) On the FORECASTING STEPS tab, in the Utilize Multiple Forecasts section, choose
Method Calculated Weighted Average Forecast and enter the values for the
percentages.
e) Save your profile.
3. Try out your forecast profile in your Demand Planning favorite for your HT_0## Product
ID at the Product ID, Location ID, and Customer ID level.
b) In the Application Jobs section, choose Run ->Statistical Forecasting.
c) Ensure that the Product ID, Location ID, and Customer ID attributes are
selected.
d) Choose Weekly as the Time Period.
e) Select your CompFcst## forecast profile.
f) Choose KG as the UOM To ID and Base Version in the Versions field.

Lesson: Using Composite Forecasting
g) Select the Filter tab and choose Product ID in the Attribute field and HT_0## in the
Values field.
i) You can check the planning run by choosing Status → Statistical Forecasting.
j) When the status shows as completed, go to the next exercise step.
b) Observe the update of the Statistical Forecast Qty key figure values in future weeks.
5. Check for any MAPE alerts in the Monitor Custom Alerts tile.
a) In the SAP Fiori launchpad, in the Alerts group, choose the Monitor Custom Alerts tile.
b) Choose your alerts in the left column.

How do these MAPE values compare with the previous values?

a) In the Excel UI, in the Advanced section, choose Statistical Forecasting → Status.

Unit 3: Forecasting
LESSON SUMMARY

Unit 3
Lesson 6
Incorporating Market Input
LESSON OBJECTIVES
Market Input
Figure 132: Adjust Statistical Forecast
Animation: Adjust Statistical Forecast

For more information on Adjust Statistical Forecast, please view the animation in
the lesson Incorporating Market Input, online in the SAP Learning Hub.
If there is additional sales or demand information that has not been included in the forecast, it
needs to be included via manual adjustments.

Unit 3: Forecasting
Figure 134: Key Figures for Mid- to Long-Term Demand Planning Quantity Key Figures
For manual adjustment one needs to be aware of the properties of the of the key figures
(being editable, aka allowing manual entry).
Key Figures properties can be displayed in SAP IBP Microsoft Excel UI, using the Edit View →
Edit Planning View option. Tooltip is available to show key figure properties, one just needs to
mouse over the key figure in the Key Figure tab.

Unit 3
Exercise 7
Incorporate Market Input into the Forecast
Simulation: Incorporate Market Input into the Forecast

For more information on Incorporate Market Input into the Forecast, please view
the simulation in the lesson Incorporating Market Input online in the SAP
Learning Hub.
We cannot only rely on the statistical forecast, when something happens in the future that did
not happen in the past. This can be special events, promotions, or other market changes. For
these, we need to adjust the forecast.
1. Log in to the Excel UI, choose your Demand Planning favorite, and ensure that you have
the following key figures available: Sales Forecast Qty, Demand Planning Qty, and
2. Change the value in the Sales Forecast Qty key figure to 2000 KG four weeks from now for
Product ID HT_0##, Location ID HD_DC_CA, and Customer ID NA100, and simulate the
result.
3. Change the value in the Consensus Demand without Promotions key figure to 3000 KG
four weeks from now for Product ID HT_0##, Location ID HD_DC_CA, and Customer ID
NA100, and simulate the result.
4. Using the SAP Fiori UI, observe how the calculations for these key figures are configured.

Unit 3
Solution 7
Incorporate Market Input into the Forecast
Simulation: Incorporate Market Input into the Forecast

For more information on Incorporate Market Input into the Forecast, please view
the simulation in the lesson Incorporating Market Input online in the SAP
Learning Hub.
We cannot only rely on the statistical forecast, when something happens in the future that did
not happen in the past. This can be special events, promotions, or other market changes. For
these, we need to adjust the forecast.
1. Log in to the Excel UI, choose your Demand Planning favorite, and ensure that you have
the following key figures available: Sales Forecast Qty, Demand Planning Qty, and
a) Log in to the Excel UI with the login credentials provided by the instructor.
b) Choose your favorite Demand Planning.
c) Notice that the key figures Sales Forecast Qty, Demand Planning Qty and Consensus
Demand without Promotions are the same as the Statistical Forecast Qty unless a
manual override has been entered.
2. Change the value in the Sales Forecast Qty key figure to 2000 KG four weeks from now for
Product ID HT_0##, Location ID HD_DC_CA, and Customer ID NA100, and simulate the
result.
a) Locate the Sales Forecast Qty key figure for Product ID HT_0##, Location ID
HD_DC_CA, and Customer ID NA100.
b) Change the value in that row to 2000 KG four weeks from the current week.
c) In the Data input section, choosing the Simulate → Simulate (basic) to simulate the
result.
d) Notice that the Demand Planning Qty key figure has changed and is now equal to the
Sales Forecast Qty.
3. Change the value in the Consensus Demand without Promotions key figure to 3000 KG
four weeks from now for Product ID HT_0##, Location ID HD_DC_CA, and Customer ID
NA100, and simulate the result.
a) Locate the Consensus Demand without Promotions key figure for Product ID HT_0##,
Location ID HD_DC_CA, and Customer ID NA100.
b) Change the value in that row to 3000 KG four weeks from the current week.
c) In the Data input section, choose Simulate → Simulate (basic) to simulate the result.

Lesson: Incorporating Market Input
d) Observe that the value remains 3000 KG.
4. Using the SAP Fiori UI, observe how the calculations for these key figures are configured.
a) Log in to the SAP Fiori UI with the login credentials provided by the instructor.
b) In the Model Configuration group, choose the Configuration tile and navigate to the Key
Figure tab.
c) Choose the ZSAP6 planning area and review the calculation of the key figures.
What is the calculation of SALESFCSTQTY@LOCPRODCUSTWEEKLY?
What is the calculation of DEMANDPLANNINGQTY@LOCPRODCUSTWEEKLY?
What is the calculation of CONSENSUSDEMAND@LOCPRODCUSTWEEKLY?

Unit 3: Forecasting
LESSON SUMMARY

Unit 3
Lesson 7
Measuring Performance Using Alerts
LESSON OBJECTIVES
Performance Measurement Using Alerts
● Custom alerts are used to find important or critical supply chain issues such as inventory
shortages, an imbalance of supply and demand, or any unexpected changes in the supply
chain.
● You can specify the threshold values that are used to determine issues. For example, you
can specify the threshold values for minimum stock levels at a particular location.
● Based on these threshold values, the system analyzes the data on the fly and finds where
the threshold values are reached. This enables you and your colleagues to react quickly,
before a supply chain situation becomes a problem.
● Custom alerts are generated by the system and visible to assigned users regarding
important or critical supply chain situations. Information contained in the custom alert
allows users to analyze and measure the impact of unexpected situations on their
business. Users can fine-tune the criteria for alerts to be generated to mitigate issues in
the supply chain.
● In Demand planning processes, the most important alerts can be defined to measure
forecast error and forecast accuracy.
Forecast Error Measures

In IBP, the following forecast error measures can be used:
● Mean Percentage Error (MPE)

The mean percentage by which the ex-post forecast differs from the historical values.
● Mean Absolute Percentage Error (MAPE)
The mean absolute percentage by which the ex-post forecast differs from the historical
values.
● Mean Squared Error (MSE)
The mean squared error by which the ex-post forecast differs from the historical values.
● Root-Mean-Square Error (RMSE)
The root-mean-square error by which the ex-post forecast differs from the historical
values.

Unit 3: Forecasting
● Mean Absolute Deviation (MAD)

The absolute value by which the ex-post forecast differs from the historical values,
averaged over all periods for which the ex-post forecast is calculated.
● Error Total (ET)
The sum of all differences between the ex-post forecast and the historical values.
● Mean Absolute Scaled Error (MASE)
The mean absolute scaled error of one data point is defined as the one-period-ahead
forecast error divided by the average forecast error of the naïve method.
● Weighted Mean Absolute Percentage Error (WMAPE)
Also called the "MAD/mean ratio", WMAPE is the sum of absolute errors divided by the
sum of the historical values.
Note:
All forecast error measures must be set in the Postprocessing steps in forecast
models.
Note:
All formulas for every measure will be provided by instructor.
When something is wrong, the system notifies you with the help of alerts. For example, you
see that the forecast value is more than it should be or that a forecast error is above the
allowable value.
Figure 136: Custom Alert Examples
LESSON SUMMARY

Unit 3
Learning Assessment
1. What methods can be used to specify how the system should utilize the selected
algorithms in case of multiple algorithm usage?
X A Choose Best Forecast based on selected error measure
X B Choose Best Forecast based on segmentation
X C Calculate Weighted Average


UNIT 4 Lifecycle Planning
Lesson 1
Planning Product Lifecycles 120
Exercise 8: Forecast a New Product 123
Lesson 2
Using Phase-in and Phase-out Profiles 128
Exercise 9: Use Phase-in and Phase-out Profiles 135
Lesson 3
Realigning Data 139
Exercise 10: Realign Data 147
UNIT OBJECTIVES
● Plan product lifecycles

● Use phase-in and phase-out profiles
● Realign data to reflect business changes

Unit 4
Lesson 1
Planning Product Lifecycles
LESSON OBJECTIVES
Lifecycle Planning
From time to time a company has to introduce new products in the current product portfolio.
This can be caused by either legal reasons, by the need of new packaging or the new product
can establish an absolutely new product category for the company.
Demand planning aims to create a high quality automated forecast for future demand of a
product. This is done by sophisticated statistical algorithms that calculate a future time series
with the knowledge of past values. For new products, such past values, which equals the
number of sold items of the product in the past, do not exist. This problem can be solved by
manual creation of forecast data or by copying historical data of reference products to the
new product.
The best way to deal with new product is nevertheless to define reference products for the
new product that are taken into account dynamically in the forecast engine at the time of the
forecast run.
The main business goal of lifecycle planning for demand planning processes is improving
forecast accuracy for new products.
Figure 137: Lifecycle Planning Business Goal

Lesson: Planning Product Lifecycles
Animation: Lifecycle Planning Business Goal

For more information on Lifecycle Planning Business Goal, please view the
animation in the lesson Planning Product Lifecycles, online in the SAP Learning
Hub.
The product Lifecycle Process is one of the key topics in the Demand Planning area.
This is the case because the introduction of new products to the market as well the
elimination of obsolete products from the market are critical times in the lifecycle of a product
that needs special attention from a planners perspective.
Especially the introduction part is a fragile process with lots of potential to loose sales.
Example: Marketing Campaign started, customers want to buy the new product, but it is
already out of stock in the supermarkets because of wrong planning.
● Like modeling: leverage the sales history of an existing reference product to forecast a new
product.
● Phase-in: Leverage different phase-in curves to introduce the product. Usually, sales
slowly picks up or shows an exponential trend and then flattens after some time. We have
already made good progress in the last releases where we added the Like Modeling piece
as well as the support for Phase-in. In IBP we already have some predefined phase-in
curves and are now moving towards user-defined curves.
● Phase-out: Other way round, Product is slowly taken off the market using excess
inventory. Maybe it is also replaced by another product.
Figure 139: Lifecycle Planning Overview
Product references are defined for new products via the Manage Product Lifecycle Fiori app.
For product references weighted factors and daily offsets can be defined. Several references
can be defined for one new product.
Within the Manage Forecast Models Fiori app, the flag “Consider products lifecycle
information” needs to be set for individual forecast model if system should consider the
product references defined in theManage Product Lifecycle Fiori app. The forecast model can
be set up for statistical forecast algorithms, as well as demand sensing.
The forecasting engine is on the fly replacing the historic data for the new product with the
historic data of the products references. If you want to use the own history of the new product

Unit 4: Lifecycle Planning
as quickly as possible, you may assign the new product itself as a reference product with a
weighing factor of 100%.
Figure 140: Lifecycle Planning Process Overview
In order to define reference products for a new product in SAP IBP for Demand, your planning
area must fulfill some prerequisites. These prerequisites are checked when user enters the
Manage Product Lifecycle Fiori application.
● Business meaning: Define which attribute of the planning area represents the Product ID.
● To define assignments of reference products and to run forecasting for new products, the
respective planning objects need to be created for these products first.

Unit 4
Exercise 8
Forecast a New Product
Simulation: Forecast a New Product

For more information on Forecast a New Product, please view the simulation in
the lesson Planning Product Lifecycles online in the SAP Learning Hub.
The Demand Planner wants to start forecasting for a new product that has never been sold
before and therefore has no historical data. A similar product with history can be used to
provide the historical data for forecasting.
1. Since this product has not yet been created in the source system and it is critical to start
forecasting immediately, we need to create the required master data directly in SAP IBP.
Use the functionality of Master Data Workbook to create the Product ID and associated
attributes.
2. Use the functionality of Master Data Workbook to create the Location Product
combinations for your new product NEW-##.
3. Create the master data for Unit of Measure (UoM) conversion.
4. Create a Lifecycle Profile to forecast your new product using HT_0## as a reference
product.
5. Create the planning combinations needed to plan your NEW-## product.
6. Ensure that the forecast model SimpleMovingAvg## created in a previous step takes into
account the product lifecycle information.
7. In your Demand Planning favorite, update your Prod ## filter to include your NEW-##
Product ID.
8. Use the SimpleMovingAvg## Forecast Profile you updated previously to execute a

forecast for your Prod ## selection at the Product ID and Customer ID level.
10. Check the values of MAPE and MASE in the Business Log.

Unit 4
Solution 8
Forecast a New Product
Simulation: Forecast a New Product

For more information on Forecast a New Product, please view the simulation in
the lesson Planning Product Lifecycles online in the SAP Learning Hub.
The Demand Planner wants to start forecasting for a new product that has never been sold
before and therefore has no historical data. A similar product with history can be used to
provide the historical data for forecasting.
1. Since this product has not yet been created in the source system and it is critical to start
forecasting immediately, we need to create the required master data directly in SAP IBP.
Use the functionality of Master Data Workbook to create the Product ID and associated
attributes.
a) In to the Excel UI, navigate to Master Data section.
b) Choose Master Data Workbook → Edit.
c) Select the Product tab, select the Edit checkbox, and choose OK.
d) Select the row for one of your ## Products and do an Excel copy.
e) Paste this in the first blank row.
f) Change the Product ID to NEW## and ensure that all other non-required fields are also
copied.
g) Choose Save Changes. A comment is optional.
2. Use the functionality of Master Data Workbook to create the Location Product
combinations for your new product NEW-##.
a) In to the Excel UI, navigate to Master Data section.
c) Select the Location Product tab, select the Edit checkbox, and choose OK.
d) On the Location Product tab, select the rows for one of your ## Products and all three
locations and do an Excel copy.
e) Paste this in the first three blank rows.
f) Change the Product ID to NEW## and ensure that all other non-required fields also
copied.
3. Create the master data for Unit of Measure (UoM) conversion.

a) In to the Excel UI, In to the Excel UI, navigate to Master Data section.
c) Select Unit of Measure Conversion tab, select the Edit checkbox, and choose OK.
d) On the Unit of Measure Conversion tab, select the rows for one of your ## Products for
both UOM conversion entries and do an Excel copy.
e) Paste this in the first two blank rows.
f) Change the Product ID to NEW## and ensure that all other non-required fields also
copied.
h) Close this workbook, but do not save a local copy.
4. Create a Lifecycle Profile to forecast your new product using HT_0## as a reference
product.
a) Log in to the SAP Fiori Web UI.
b) In the Demand Planner group, choose the Manage Product Lifecycle tile.
c) Choose Add → Single Product Assignment. Choose planning area ZSAP6, the new
product just created, and the launch dimension, for example, CustomerID. Choose
OK.
d) In the Product Assignments section, choose Add, select your HT_0## product and add
weight = 100% of the assigned product. Choose OK.
e) In the Forecast Dates section choose Add. Choose the NA100 customer and set the
current date as the forecast date.
f) Choose OK and then Save.
5. Create the planning combinations needed to plan your NEW-## product.

a) In the main screen of Manage Product Lifecycles, select the NEW## row and choose
Planning Object Actions → Create planning Objects for Selected Assignments on the
toolbar.
b) Select key figure Statistical Forecast Qty and Actuals Qty.
c) Choose Create.
6. Ensure that the forecast model SimpleMovingAvg## created in a previous step takes into
account the product lifecycle information.
a) Log in to the SAP Fiori launchpad and in the Demand Planner group, choose the
Manage forecast models tile.
b) Choose your SimpleMovingAvg## forecast profile and choose Edit.
c) On the General tab, select the Consider Product Lifecycle Information checkbox.
d) Save your profile.
7. In your Demand Planning favorite, update your Prod ## filter to include your NEW-##
Product ID.

b) In the Planning View section, choose Filter → Edit.
c) Add your NEW-## Product ID and choose Update.
d) Choose OK to display your planning view and stay in the planning view for the next
step.
8. Use the SimpleMovingAvg## Forecast Profile you updated previously to execute a

a) In the Application Jobs section, choose Run → Statistical Forecasting.
b) Ensure the Product ID and Customer ID attributes are selected.
c) Choose Weekly as the Time Period.
d) Select your SimpleMovingAvg##forecast profile.
e) Choose UOM To ID KG and the Base Version.
f) Select the Filter tab and select your Prod ## filter.
g) Choose Next and Run (the Reason Code and Comment are optional).
h) Optionally, check the planning run by choosing Statistical Forecasting → Status.
i) When the status shows as completed, go to the next exercise step.
b) Observe that your NEW-## product now appears and has values in the Statistical
Forecast Qty key figure in the future weeks, but no historical data.
10. Check the values of MAPE and MASE in the Business Log.
a) In the Excel UI, in the Application Job section, choose Status → Statistical Forecasting.

What was the MAPE value for your NEW-## Product for each Location, Customer
combination?
What was the MASE value for NEW-## Product for each Location, Customer
combination?

LESSON SUMMARY

Unit 4
Lesson 2
Using Phase-in and Phase-out Profiles
LESSON OBJECTIVES
Product Lifecycle app
Figure 142: Starting the Manage Product Lifecycle app in SAP Fiori
Phase-in and Phase-Out Profiles

Manufacturers introduce new products into their product portfolio on a regular basis.
Demand planning aims at producing high-quality automated forecasts for the future demand
of a product. This is done by sophisticated statistical algorithms that calculate a future time
series based on the knowledge of historic sales values. However, for new products, historic
values do not exist.
You therefore search for products that have a similar historical sales pattern and assign them
as reference products to the new product. These reference products are then taken into
account dynamically in the forecast engine at the time of the forecast run for the new product.
When you introduce a new product or phase out an existing product, you expect the demand
to be noticeably different to that in the “mature” phase of the product’s life. Phase-in/out
modeling lets you take this behavior into account.
To define reference products for a new product in SAP Integrated Business Planning for
demand, your planning area must fulfill the following prerequisites:
● You have defined which attribute of the planning area represents the product ID.

Lesson: Using Phase-in and Phase-out Profiles
● You have created the respective planning objects for your new products using key figure
upload or the copy operator, or you have created the planning objects in Microsoft Excel.
● Recommended: You have defined which attribute of the planning area represents the
product description and the product group. If you do not do this, the Manage Product
Lifecycle app cannot handle descriptions or product groups for the products and the
system uses the product ID instead.
● Recommended: You have set the business meaning Actual Sales for one key figure of the
planning area.
Figure 143: Preconfigured Phase-in and Phase-out Curves – Linear Curve
Figure 144: Preconfigured Phase-in and Phase-out Curves – Superlinear and Sublinear Curves
You can plan the phase-in and phase-out process for a new product by specifying the start
and end dates for the phase-in and phase-out and optionally assigning a curve.

The phase-in start date defines the point in time when a product is sold in the market.
Forecasting is not generating results for periods with an end date that is before the phase-in
start date.
The phase-out start date is the point in time when the product is gradually sold less than in
the maturity phase. The phase-out end date is the point in time when the product is no longer
sold in the market. The forecast engine does not generate results after this point of time.
The curves show the expected demand development of the product during phase-in and
phase-out. Phase-in and phase-out curves represent percentage time series. The
percentages are multiplied by the forecast result in the phase-in time horizon that is defined
by the phase-in start and end dates.
Predefined Curves
The following curve types are available:
● Linear
The linear curve is calculated by a linear interpolation between 0.1 and 0.9.
● Sublinear
The sublinear curve applies the quadratic function to the time series that we obtain when
you do a linear interpolation between 0.316 and 0.949. The boundaries are calculated by
applying the reverse function of the quadratic function to the standard boundaries 0.1 and
0.9.
● Superlinear
The superlinear curve applies the square root function to the time series that we obtain
when we do a linear interpolation between 0.01 and 0.81. The boundaries are calculated by
applying the reverse function of square root to the standard boundaries 0.1 and 0.9.
Custom Curves
You can configure your own phase-in and phase-out curves. To do so, select an existing curve
type and adapt the curve parameters to your needs. You can define the following parameters:
● The number of time periods you want to display
● The function used to calculate the curve, for example, square root or quadratic
● The start and end values of the curve in percent
After changing the parameters, you can simulate the resulting curve and, if you are happy
with the result, save it for future use and assign it directly to the relevant launch dimension
value. You can use the value label switch to display or hide the values for each point of the
curve.

Figure 145: Specifying a Launch Dimension
Figure 146: Specifying Forecast Start Dates
Figure 147: Specifying Phase-in Start Dates, End Dates, and Curves

Figure 148: Specifying Phase-out Start Dates, End Dates, and Curves
The phase-in start date defines the date from which the new product is sold on the market.
The system does not generate any forecasts for time periods that lie before this date. The
phase-in end date defines the point in time when the product has reached maturity. Once the
phase-in end is reached in the historical horizon of the forecast, forecasting is based on the
product's own sales history.
The phase-out start date defines the date from which the product will be gradually withdrawn
from the market. The phase-out end marks the date at which the product is no longer be sold.
The system does not produce any forecasts after this date.
Note:
Demand sensing does not consider phase-out dates.
You can generate the phase-out for a reference product based on the phase-in of a new
product. The generated phase-out period of the reference product is identical to the phase-in
period of the reference product. The generated phase-out curve mirrors the selected phase-in
curve: The phase-out curve starts at the end value of the phase-in curve and ends at the start
value of this curve. The generated curve name contains the date the curve was created, for
example, Generated 20180205 Superlinear Curve. If there is already a curve with matching
parameters, the system uses this curve instead of generating a new one.
Usage Variants of Phase-in/Phase-out Function in IBP

There are six different variants of usage for the phase-in/phase-out function in IBP:
● Phase-in without curve
Weight of reference products can be set to use a % of actual delivery of reference products
in the future. Phase-in start and end dates should be similar. In this case, 100% of the
forecast for new product is available starting from the selected date.
● Phase-in with curve
Weight of reference products can be set to use a % of actual delivery of reference products
in the future. Phase-in start and end dates should be different. In this case, the forecast for
new product is available starting from the selected date and increases in accordance with
the selected curve.

● Phase-out without curve

In this usage, you do not need to add additional reference products because it is a phase-
out. Set the weight of product = 100%. Phase-out start and end dates should be similar. In
this case, 0% of the forecast for old product is available starting from the selected date.
● Phase-out with curve
In this usage, you do not need to add additional reference products because it is a phase-
out. Set the weight of product = 100%. Phase-out start and end dates should be similar. In
this case, the forecast for old product becomes unavailable starting from the selected end
date and decreases in accordance with the selected curve.
● Replace without curve
The weight of reference products can be set to use a % of the actual delivery of reference
products in the future. Phase-in start and end dates should be similar. In this case, 100%
of the forecast for new product is available starting from the selected date. Choose the
necessary curve with only one period inside.
At the same time, generate the phase-out profile for reference products. The start and end
dates should be aligned with the phase-in dates of the new product.
● Replace with curve
The weight of reference products can be set to use a % of the actual delivery of reference
products in the future. Phase-in start and end dates should be similar. In this case, 100%
of the forecast for new product is available starting from the selected date. Choose the
necessary curve with more than one period inside.
At the same time, generate the phase-out profile for reference products. The start and end
dates should be aligned with the phase-in dates of the new product in accordance with the
selected curve.
Note:
If you execute statistical forecast at the Product level and, at the same time, a
phase-in/out profile is generated at the ProductCustomer level, the phase-
in/out dates would not be used in the forecast, because they have different
planning levels.
Figure 149: Manage Product Lifecycle App – Collaboration

Animation: Manage Product Lifecycle App – Collaboration

For more information on Manage Product Lifecycle App – Collaboration, please
view the animation in the lesson Using Phase-in and Phase-out Profiles, online in
If necessary, the results of forecasting with phase-in/phase-out information can be shared

using local files or SAP Jam. The list of product references can be downloaded into the local
file.
Figure 151: Manage Product Lifecycle App – Detail Screen
Historical data for new product can be simulated in Manage Product Lifecycle app to check all
related information for the selected reference products, curves, periods, and dates. It can be
very helpful to generate your own curve with different reference products for different new
products and take seasonality, trends, and so on, into account.

Unit 4
Exercise 9
Use Phase-in and Phase-out Profiles
Simulation: Use Phase-in and Phase-out Profiles

For more information on Use Phase-in and Phase-out Profiles, please view the
simulation in the lesson Using Phase-in and Phase-out Profiles online in the SAP
Learning Hub.
The Demand Planner wants to start forecasting for new products as well as stop forecasting
for older products. The planner can create some custom curves if standard curves are not
good enough for the processes and introduce new products or discontinue older products.
1. Add Phase-in and Phase-out settings to your NEW-## product lifecycle profile to start the
phase-in the first day of next month and end it on the last day four months from the start
date with a superlinear curve.
2. Use the SimpleMovingAvg## Forecast Profile that you updated earlier to execute a

Unit 4
Solution 9
Use Phase-in and Phase-out Profiles
Simulation: Use Phase-in and Phase-out Profiles

For more information on Use Phase-in and Phase-out Profiles, please view the
simulation in the lesson Using Phase-in and Phase-out Profiles online in the SAP
Learning Hub.
The Demand Planner wants to start forecasting for new products as well as stop forecasting
for older products. The planner can create some custom curves if standard curves are not
good enough for the processes and introduce new products or discontinue older products.
1. Add Phase-in and Phase-out settings to your NEW-## product lifecycle profile to start the
phase-in the first day of next month and end it on the last day four months from the start
date with a superlinear curve.
b) In the Demand Planner group, choose the Manage Product Lifecycle tile.
c) Choose the line for your NEW-## product and choose Edit.
d) On the Forecast Dates tab, enter a phase-in start date of the first day of next month
and a phase-In end date of the last day of the month that is four months from the start
date.
e) In the Phase-In Curve field, choose Superlinear.
f) In the Phase-Out Curve field, choose Superlinear and enter the start and end dates 6
months after respective dates of the Phase-In curve.
g) Choose OK, then choose Save.
h) Use the IBP Back arrow to return to the main screen.
i) Now you see a new entry for the HT_0## product. Select this line and in the Forecast
Dates section, check out the Phase-Out Curve and the Start and End dates that were
generated.
j) Open the phase-out profile. Go to Forecast dates and check the phase-out start and
end dates.
2. Use the SimpleMovingAvg## Forecast Profile that you updated earlier to execute a
a) In the Excel UI, in the Application Jobs section, choose Run → Statistical Forecasting.
b) Ensure that the Product ID and Customer ID attributes are selected.
c) Choose Weekly as the Time Period.

d) Select your SimpleMovingAvg## forecast profile.
e) Choose UOM To ID KG and the Base Version.
f) Select the Filter tab and choose your Prod ## filter.
g) Choose Next and Run (the Reason Code and Comment are optional).
h) You can check the planning run by choosing Status → Statistical Forecasting.
i) When the status shows Finished, go to the next exercise step.
b) Observe that your NEW-## product now has values that phase in over time.
c) Observe also that the Statistical Forecast Qty values for your HT_0## product are
phased out over the same period.
d) Chart the Statistical Forecast Qty key figure as lines for both Product IDs, HT_0## and
NEW-##, to visually see the phase in and phase out curves.

LESSON SUMMARY

Unit 4
Lesson 3
Realigning Data
LESSON OBJECTIVES
Data Realignment
Figure 153: Data Realignment Use Cases
While operating your organization, a number of business changes may occur, such as, for
example, changes in your organization's structures, new and discontinued products, changes
in the locations of your plants or distribution centers. Such changes must be reflected in the
planning data in your IBP system. Realignment is the process of adjusting planning data, such
as planning objects and key figure values, to reflect such business changes.
Basic Assumptions:
● Starting point of realignment is a business requirement to change data.
● Realignment can be a manually-triggered process that changes planning data on an as-
needed basis and it can also be set to recurring
● Realignment can change master data, planning objects, and time series based key figures,
● Realignment rules are typically defined by planners/business users.
● A realignment run is typically executed by an administrator/IT user.
Key Features:

● Selection by attribute, time, and key figures

● Mapping of attribute values
● Realignment of multiple (dependent) attributes on different levels
● Overwrite or sum key figure values of existing planning objects
● Create new planning objects
● Split and merge planning objects
● Initialize key figure values for new planning objects
● Log processing steps
In your organization's daily operations there are a number of business changes that must be
reflected in your planning data. Such changes might include, for example, the following:
● Splitting and merging locations (distribution centers)
● Grouping and ungrouping countries based on sales numbers
● Stocking location changes
● Changes in area distribution center for products
● Sales hierarchy changes
● Product family changes
● Product merge
● Copy or assign customers with or without their key figure values to a new planning group
● Deliver to customers from different shipping location
Figure 154: Data Realignment Process Example
Data realignment in IBP – terminology

Lesson: Realigning Data
● Realignment project – contains a set of realignment steps that are executed in a defined
sequence.
● Realignment step – the processing step of a realignment project containing the rules and
control parameters to adjust planning data.
● Realignment run – execution of a realignment project. A realignment run is executed using
the Realign Planning Data application job template in the Application jobs app.
The realignment of planning data in your IBP system is set up in the Manage Realignment
Rules app, and is executed as an application job from the Application Jobs app.
The realignment process is usually triggered manually when changes in your company's
business warrant the adjustment of the planning data in your IBP system. It is executed on an
as-needed basis, and it can be used to change master data, planning objects, and time series
based key figures.
In the SAP IBP system, the process is as follows:
1. Set up a realignment project and define realignment rules.

In the Manage Realignment Rules app, the demand planner sets up a realignment project
that contains the realignment steps necessary to update the planning data. The planner
sets the sequence in which the system must execute the steps, as well as the details of
each step (for example, attribute mapping, selection options, and so on). The maximum
number of steps in a realignment project is 255.
Once the realignment project is set up, together with the system administrator, you can
review the project steps and their settings. The system administrator then sets the status
of the realignment project to Approved and runs the application job either in simulation
mode or executes the realignment run.
You can now rerun realignment projects with the status Successfully Executed without an
additional approval step. Previously, realignment projects with this status had to be set
back to the status Approved before they could be scheduled again.
● Project List Screen

In the Project List screen of the app, you can create new realignment projects, edit
existing ones, copy and delete realignment projects, and search for them. You can also
download or upload a realignment project to/from a CSV file.
● Project Overview Screen

In the Project Overview screen, you can do the following:
- Define a realignment project name and add a description
- Assign a planning area to the realignment project
- Create, copy and delete realignment steps, add descriptions, and change the
sequence of steps
- Change the realignment project status
- Review administrative information about the realignment project
● Realignment Step Screen

Here you define the name of the realignment step. The name should not be longer than
30 characters.
Attribute Mapping
The attributes you select under Attribute Mapping determine which master data types
and planning levels the system will process. The system processes the following:
- All simple master data types that contain all the selected attributes as non-root
attributes
- All compound master data types that contain all the selected attributes
- All planning levels that contain all the selected attributes as root attributes. If no
relevant planning objects exist on a processed planning level, no data is changed for
this planning level.
Consider the following rules when defining an attribute mapping:
- Specify the attributes with their source and target values.
- To map n source values to one target value, you can use the selection option Any.
- The target attribute value must be different from the source attribute value.
- You can use the same attribute multiple times, but the target value must be the
same each time. This can be used to model merge scenarios.
- If key figure values are adjusted, the same target value can be used at most in 100
mappings for the same attribute.
- You can specify only non-root attributes of one master data type in one realignment
step. The system evaluates the attribute mappings in combination.
- To be able to display descriptions for the attribute values, ensure that a description
attribute is assigned to the attribute in the master data type.
Processing Options
Here you can specify how you want your master data and key figures to be processed:
- Adjust Master Data: The realignment run applies the defined attribute
mappings to the relevant master data types.
- Adjust Key Figure Values: The realignment run applies the defined attribute
mappings to the key figures in the relevant planning levels.
- Generate Missing Target Planning Objects: The system generates

missing planning objects while adjusting key figure values.
- Source Planning Objects: The system deletes obsolete source planning

objects from the data base.
Selection
Here you can restrict the records to be processed by adding further selection criteria.
You can only select attributes that you haven't used with the selection option Equal to
under Attribute Mapping.
Key Figures

Here you can select the key figures and specify how you want the system to process
them:
- You can choose to process all applicable key figures or select the key figures to be
adjusted manually. You can only select key figures from the planning levels derived
from the Attribute Mapping section.
- When realigning key figure values, the system always considers the stored key
figure value. If a key figure is calculated and stored, the calculated value is ignored.
- If master data and key figures need to be adjusted, the master data changes are
processed first.
- You can also define how you want your key figures to be processed. For more
details about the available actions, see the Web Assistant help by pressing F1.
Note:
If one of the key figures you want to copy is fixed, the target key figures
will also be fixed. This applies to all actions except Initialize target.
- For key figure calculations that sum up values, you can decide whether key figure
values of source planning objects shall be adjusted by realignment. If you don't
select Adjust Source Key Figure Value, the source planning objects are adjusted as
follows:
- Source_New = (100 – Percentage) * Source_Old IF Percentage < 100
- Source_New = 0 IF Percentage >= 100
- Source_New = null IF Source_Old = null

Resulting source key figure vales of "0" aren't deleted.
- You can enter the percentage of the value of the source key figure you want the
system to use during the calculation of the target key figure values.
2. Review the realignment rules.

In the Manage Realignment Rules app, the system administrator together with the demand
planner review the realignment steps and the settings related to them. If all questions
have been clarified and the realignment project is ready to be run, the system
administrator sets its status to Approved.
Figure 155: Running a Realignment Project

3. Run the realignment project.

In the Application Jobs app, the system administrator sets up an application job based on
the Realign Planning Data application job template to execute the realignment run for the
realignment project. Once the application job is set up, the administrator can run the job.
Before committing to the final realignment run, you can run the application job in
simulation mode to assess the impact of the realignment run, for example, to see how
many planning objects the realignment run creates. Executing a realignment project in
simulation mode does not change any of the data or the project status.
You can simulate one step, a sequence of steps, or all of the steps of a realignment
project.
A realignment run can only be executed for realignment projects with status Approved.
This is not required when you execute the realignment run in simulation mode.
Note:
In simulation mode, every realignment step is evaluated independently.
Potential changes by previous steps are not considered.
Figure 156: Reviewing the Results of a Realignment Run
4. Review the results of the realignment run.

In the Application Logs app, the system administrator reviews the processing information
of the realignment run.
Each realignment run, even in simulation mode, creates an application log with detailed
processing information, such as the following:
● Planning versions and scenarios processed
● Affected master data
● Affected planning levels
● Affected key figures
● Affected planning objects
Object lists are provided as .csv attachments.

The Search field can be used, for example, to display only messages of a specific step or to
find information for a certain planning level.
Recurring Realignment Functionality
You can now rerun realignment projects with the status Successfully Executed without an
additional approval step. Previously, realignment projects with this status had to be set
back to the status Approved before they could be scheduled again.
Solution Details – Realignment Projects
1. Supported attribute types:
● Attribute types NVARCHAR and INTEGER are supported.
● Attribute types TIMESTAMP and DECIMAL are not supported.
2. Supported Master Data Types:
● Simple and compound master data types are supported.
● Reference, virtual and external data types are not supported.
3. Creation and deletion of Master Data Type records:
● Simple master data types: Realignment neither creates nor deletes records of master
data types. It may only change non-root attributes of existing master data types
records. The reason is that the creation of master data type values is considered as a
separate process that may involve different people/systems.
● Compound master data types: If needed new records of compound master data type
are created. Prerequisite is that the key attributes exist in the referenced simple
master data type. No existing records of compound master data types are deleted
4. When copying key figure values, the system uses stored values. If a key figure is calculated
and stored, the calculated values is ignored.
5. If master data and key figures are adjusted, the master data changes are processed first.
6. If no relevant planning objects exist at a processed planning level, no data is changed for
that planning level.
7. Realignment steps are processed sequentially and changes are committed after each
step.
8. If a realignment step fails, subsequent steps are not processed as they may be dependent
on previous steps.
9. Key figure editability is not considered in realignment. For example, it is possible to realign
past values of key figures that are only editable in the present or future.
10. Order-based key figures cannot be used in realignment.
11. Permission filters are not taken into consideration by realignment.

Figure 157: Statuses and Status Changes of Realignment Project

Unit 4
Exercise 10
Realign Data
Simulation: Realign Data

For more information on Realign Data, please view the simulation in the lesson
Realigning Data online in the SAP Learning Hub.
While operating your organization, a number of business changes can occur, for example,
changes in your organization's structures, new and discontinued products, changes in the
locations of your plants or distribution centers. Such changes must be reflected in the
2. In the Application jobs app, simulate the realignment project.
3. In the Application Jobs app, run the realignment project.
4. Check results in the Excel add-in.
5. Check the status of the realignment project.

Unit 4
Solution 10
Realign Data
Simulation: Realign Data

For more information on Realign Data, please view the simulation in the lesson
Realigning Data online in the SAP Learning Hub.
While operating your organization, a number of business changes can occur, for example,
changes in your organization's structures, new and discontinued products, changes in the
locations of your plants or distribution centers. Such changes must be reflected in the

b) In the Demand Planner group, choose the Manage Realignment Rules tile.
c) Choose Create Realignment Project.
d) In the General section of realignment project, enter Realignment_## as the Project

name and choose the required planning area.
e) Go to the Realignment steps section and choose Create.
f) In the General section of the realignment step, enter Step01 as the Step name.
g) Go to the Attribute mapping section and choose Add.
h) Choose Product ID as the attribute, HT_0## as the source value, and NEW-## as the
target value.
i) Under Processing section, choose selection option Adjust Key Figure values and then
Generate Missing Target Planning Objects.
j) Under Key Figures section, choose selection option All Key Figures and for key
figure processing options choose Adjust Source Key Figure Values → Keep Values.
k) Leave the rest of the values at their default values and choose Apply and Create to save
the project.
l) In the upper right, set the status to Set to In Review, then set it to Set to
Approved.
2. In the Application jobs app, simulate the realignment project.

a) Go to the main SAP Fiori Web UI page.
b) In the General Planner section, choose the Application Jobs tile.

c) Choose Create and choose Realign Planning Data in the Job Template field.
d) Choose your project name.
e) Ensure that the Simulate indicator is selected and choose Schedule.
f) Check the status on the main screen of the application.
g) When finished, view the log to see what the realignment job would have done.
3. In the Application Jobs app, run the realignment project.

a) In the Application jobs tile, select your Realign Planning Data job and choose Copy.
b) Ensure that the Simulate indicator is not selected and choose Schedule.
c) Check the status on the main screen of the application until it finishes.
4. Check results in the Excel add-in.

a) In the Excel UI, in the Planning View section, choose Favorites → Demand Planning.
b) Check the data for the NEW-## product.

The values from the HT_0## product are now copied to the NEW-## product for the
attribute values included in the Realignment Project.
The attribute values that already existed were not changed.
5. Check the status of the realignment project.

a) In the SAP Fiori launchpad, in the Demand Planner section, choose the Manage
realignment rules tile.
b) Locate your realignment project and check the status, which should be Succesfully
Executed.

LESSON SUMMARY

Unit 4
Learning Assessment
1. What business changes are considered candidates for data realignment?

Choose the correct answer.
X A Splitting and Merging Locations (Distribution Centers)
X B Product Merges
X C Sales Hierarchy Changes
X D All of the above


UNIT 5 Promotion Planning
Lesson 1
Planning Promotions 154
Exercise 11: Plan Promotions 161
Lesson 2
Creating Promotions 167
Lesson 3
Managing Past Promotions 173
UNIT OBJECTIVES
● Plan promotions
● Create a promotion
● Manage a past promotion

Unit 5
Lesson 1
Planning Promotions
LESSON OBJECTIVES
● Plan promotions
Promotion Planning
Trade promotions are a key sales driver in many businesses. In the consumer products
industry for example, promotions may drive up to 50% of the overall sales volume. Instead of
providing dedicated promotion planning functionality, SAP Integrated Business Planning
focuses on the integration of promotions that are planned in a trade promotion planning
system. The key objectives to leverage promotional data in the planning and forecasting
process in SAP Integrated Business Planning are:
● Get transparency on promotional sales lift in the planning process.
● Consider promotional sales uplift in a special way during forecasting and demand sensing.
● Facilitate collaboration and alignment on promotions between sales/marketing and
demand planners.
● Distribute promotions sales to locations (distribution centers) according to certain rules.
Figure 159: Analyze Promotions App
Animation: Analyze Promotions App

For more information on Analyze Promotions App, please view the animation in
the lesson Planning Promotions, online in the SAP Learning Hub.

Lesson: Planning Promotions
Promotions are planned in promotion planning tools, such as Trade Promotion Management
in SAP CRM, or, in simple cases, even in Microsoft Excel. These systems focus of the sales
and financial aspects and not on the logistics aspects such as distribution centers or supply
chain constraints.
Promotion data is used to create more accurate demand forecasts. As a demand planner, you
get transparency on promotion data, and separate the impact promotions have had on
historical sales data. After creating the demand forecast, you can add promotion data to
create the final demand plan.
Through this process, you use the Analyze Promotions app to inspect promotion data and
decide if a promotion should be included in forecasting or not. You run a forecast for multiple
products or product groups in the background with mass processing, then review and adjust
the figures interactively using the IBP Excel add-in. As an analyst or data scientist, you can
create and edit forecast models as required to exclude the effect promotions have on sales
data to achieve accurate forecasting.
Figure 161: Promotions Data Transfer
If you want the system to transfer promotion data from an external system and integrate the
data in forecasting, you must ensure that the following applies:
● Data is transferred from the external system used for promotion planning (such as Trade
Promotion Management in SAP CRM). The data to be transferred must contain the
promotion ID, the data source of the promotion, time level, product ID, and the status of
the promotion. You can also include customer or customer group data, and location data.
● The planning area in SAP Integrated Business Planning that you use for demand
forecasting is set up for demand sensing or for mid-term and long-term forecasting and is
enabled to process the promotion data.
● If you use SAP Cloud Platform Integration for data services to transfer promotion master
data and key figure values, the integration service must be connected to the trade
promotion planning system and to your SAP Integrated Business Planning system.
Promotions can be loaded using SAP Cloud Platform Integration for data services (CPI-DS) or
by a .csv file upload into SAP Integrated Business Planning. In the case where CPI-DS is used,
transformations and mappings can be performed there. Loaded promotions must contain a

Unit 5: Promotion Planning
product reference. They can contain the following additional references: product groups,
customers, customer groups, brands, categories, or locations (when the location split was
done outside of SAP Integrated Business Planning). Note the following:
● The sales lift or total value stored at the Promotion Level in SAP Integrated Business
Planning is not changed.
● The promotion data is distributed to locations (distributions centers) using Advanced
Copy operators.
● The Demand Planner uses the Analyze Promotions app to analyze promotions and their
allocation to locations. If needed, they can adjust the location split.
● In a forecasting/demand sensing run, promotions can be eliminated from historical data
using a dedicated pre-processing step.
● To calculate the Consensus Demand, future promotions are added to the statistical
forecast.
Figure 162: Enhanced SAP6 Data Models
SAP Integrated Business Planning for demand can process promotion data that is stored in a
trade promotion planning system, such as Trade Promotion Management in SAP CRM.
Usually, these systems focus on the sales and financial effects of the promotions, not on the
supply chain planning aspect. Typically, they store the data without location information.
Data, therefore, must still be disaggregated to the promotion disaggregation level, which
usually also includes the location, in the demand application. You can then do forecasting that
takes promotions into consideration.
Activation Checks
To use promotions in SAP Integrated Business Planning for demand, your planning area must
fulfill some prerequisites. These prerequisites are checked during the activation of the
planning area.
In SAP Integrated Business Planning you need, for example, a dedicated planning level for
promotions where a key figure with business meaning Promotion Uplift (Source) or
Promotion Total (Source) exists.

Note:
The SAP6 template planning area has been enhanced to fulfill all the prerequisites.
We recommend you use a copy of the SAP6 planning area, and adjust it if
required.
If a planning area contains promotion key figures with business meaning Promotion Uplift
(Source) or Promotion Total (Source), a set of checks is applied during planning area
activation:
1. Promotion Level Checks:
● The promotion level is the planning level at which the promotion source key figure
exists.
● A planning area can have only one promotion level.
● The aggregation mode of the promotion source key figure has to be sum or custom.
● Attributes with business meaning Promotion ID and Promotion Source ID have to be

assigned as Root.
● The promotion level must contain an attribute representing product (business meaning
Product ID).
● Up to four additional master data type attributes should be selected as Root (for
example, PRODUCTID, CUSTOMERID, PRODUCTGROUPID, and BRANDID). Only a
warning is raised if this condition is not fulfilled.
2. Promotion Disaggregation Level Checks:
● Promotion disaggregation level is the planning level at which the key figure with
business meaning Promotion Final exists.
● Aggregation mode of the key figure with business meaning Promotion Final has to be
sum or custom.
3. Additional Consistency Checks:
● The promotion disaggregation level must have the time attribute assigned (for
example, weeks) that is defined as Root at the promotion level. In the SAP6 planning
area, weeks are used as root time level at the promotion level and technical weeks are
used as root time level at the promotion disaggregation level. In addition, weeks are
selected as a possible time level at the promotion disaggregation level.
● Several attributes of the promotion master data type (for example, S6PROMOTION)
are used in the Analyze Promotions app (for example, IBPPROMOSTATUS). If they are
missing, the system displays a warning message.

Figure 163: Promotion Processing
Animation: Promotion Processing

For more information on Promotion Processing, please view the animation in the
lesson Planning Promotions, online in the SAP Learning Hub.
The following are the main process steps when processing promotions:
1. Load/calculate location split factors.
● Controls how the sales lift for a product is split to locations (distribution centers).
● Are typically product specific, but may depend on additional attributes, such as
customer region.
● Are stored as a key figure at the Promotion Location Split level.
● Should be stored using the same time periods as the promotion disaggregation level.
Ways to upload/calculate Location Split Factors:
● Upload using SAP Cloud Platform Integration for data services (CPI-DS).
● Upload from a .csv file.
● Calculate from historical key figures using the Advanced Copy operator with period
offset.
● Calculate from historical key figures using time periods in key figure calculations.
2. Load promotion master data, then sales lift or promotion total values.
● Load Promotion Master Data (using CPi-DS or a .csv file upload).
● Load sales lift key figure of promotions (using CPI-DS or a .csv file upload).
3. Check the promotions transferred in the Analyze Promotions app.

This step is optional. Customers can decide if they want to check loaded promotions. In
the case of problems, the demand planner may decide to start a clarification with the
responsible promotion planner, and to temporarily exclude a promotion from planning.
4. Distribute promotion data to locations.

The promotion sales lift from the promotion level is disaggregated to the promotion
disaggregation level according to the factors defined on the location split level. This is
realized by the following steps:
a. Calculate an initial location split of the promotion sales lift at the promotion
disaggregation level using the calculated Helper Key Figure for Promotion Split. The
resulting location split may not have the correct absolute values yet.
b. To store the initial location split, the Helper Key Figure for Promotion Split is copied to
the stored Promotion Uplift key figure using the Advanced Copy operator.
c. Disaggregate the promotion sales lift from the promotion level to the Promotion Uplift
key figure at the promotion disaggregation level proportionally to its existing values
(that is, the initial location distribution calculated previously) using the Advanced Copy
operator. Depending on your modeling, a time disaggregation may also happen in this
step.
5. Check or adjust the distribution of promotion data to locations in the Analyze Promotions
app.
6. Run forecasting/demand sensing with the Promotion Sales Lift Elimination preprocessing
step.
Use the Promotion Sales Lift Elimination pre-processing step to remove promotion sales
uplift from the sales history key figure. This improves the data basis for the forecasting/
demand sensing run.
7. Calculate Consensus Demand as a forecast result and add future promotions.
8. Check the forecast result in Excel and use the Analyze Promotions app for further analysis.
The Analyze Promotions app allows you to calculate the success of past promotions.
Promotion success is calculated in the root periodicity of the promotion level and can only
include data that was loaded before the current period.
Before you trigger the calculation, you must select the key figure that contains the sales data
for which you need to determine the average number of sold items. By default, the key figure
with the business meaning Actual Sales is selected. If you select another key figure instead,
the next time you trigger a calculation, this key figure is displayed.
The result of the success calculation is displayed in the Promotion Success column. By
clicking on the percentage value, you can navigate to the details.
For promotions based on key figures with the Promotion Total business meaning, the
promotion success is calculated as follows:
● Average number of sold items in promotion periods divided by the average number of sold
items in periods without promotions
For promotions based on key figures with the Promotion Uplift business meaning, the
promotion success is calculated using the following formula:
● Average number of sold items in promotion periods minus the average number of sold
items in periods without promotions divided by the average planned uplift

These formulas do not require a baseline calculation.

A period without promotions is a period where no promotion exists for the relevant objects,
for example, for product and customer if product and customer are the root attributes of the
promotion level. Periods directly before and after promotions are not considered as periods
without promotions because of possible pre-dip and post-dip effects.
Promotion success is negative if fewer items are sold in promotional periods than in periods
without promotions.
Impact of Seasonality
To consider the seasonal behavior of the sales of a product, you select a specific number of
periods per season. The following prerequisites apply:
● You specify the number of periods per season at the root time level of the promotion level,
that is, the time level in which the promotion is loaded.
● If the number of periods per season is 0 or 1, seasonality is not considered.
● If the number of periods per season is greater than 1, only those past periods in the sales
key figure are used for the calculation of the average number of sold items in un-promoted
periods that fit to the given seasonality.
Impact of Trends
To calculate promotion success, the system uses an algorithm with exponential smoothing
for calculating the average number of sold items in periods without promotions. Only periods
before the promotion in question are considered for calculating the average. Using this
strategy, you take the trends into account that could be observed before the promotion took
place. The periods closer to the promotion are given more weight in the exponential
smoothing algorithm than the periods further in the past.

Unit 5
Exercise 11
Plan Promotions
Simulation: Plan Promotions

For more information on Plan Promotions, please view the simulation in the
lesson Planning Promotions online in the SAP Learning Hub.
In your IBP demand plan, you need to model externally planned promotions.
1. Add a tab to your Demand Planning favorite called Promotions by copying the first tab.
Use the data in the following table and be sure to update your Favorite.
Field Value
Time Weekly, from current week to 20 weeks in the fu-

ture
Planning Level Product ID;

Location ID;
Customer ID
Key Figures Promotion Uplift (internal key figure)

Promotion Uplift
Promotion Uplift (Source)
Helper Key Figure for Promotion Split
Filter Product ID = HT-0##
2. Analyze the Promotion planning view to understand the key figures and record the current
values in the following table.
Key Figure Week 1 Week 2 Week 3

Promotion Uplift
Promotion Uplift (Internal key figure)
Help Key Figure for Promotion Split
3. Run the Advanced Copy Operator Promo Split 2 Promo Uplift. To use the externally
planned promotions in our IBP demand plan, we need to execute a copy job that copies
the values of the Help Key Figure for Promotion Split to the Promotion Uplift (Internal key
figure). Then, only the values of active promotions appear in the Promotion Uplift key
figure.

4. Refresh your planning view and record the values of the key figures in the following table.

Promotion Uplift
5. Add a tab to your Demand Planning favorite called Final Forecast by copying the existing
Promotions tab. Use the data in the following table and be sure to update your Favorite.
Field Value
Time Weekly, Current week to 20 weeks in the

future

Location ID;
Customer ID
Key Figures Consensus Demand

Promotion Uplift
6. Locate a cell in which the Promotion Uplift key figure has values. Notice that Consensus
Demand = Promotion Uplift + Consensus Demand without Promotions. Now, all active
promotions are added into the Consensus Demand key figure, which becomes the final
forecast.

Unit 5
Solution 11
Plan Promotions
Simulation: Plan Promotions

For more information on Plan Promotions, please view the simulation in the
lesson Planning Promotions online in the SAP Learning Hub.
In your IBP demand plan, you need to model externally planned promotions.
1. Add a tab to your Demand Planning favorite called Promotions by copying the first tab.
Use the data in the following table and be sure to update your Favorite.
Field Value
Time Weekly, from current week to 20 weeks in the fu-

ture

Location ID;
Customer ID
Key Figures Promotion Uplift (internal key figure)

Promotion Uplift
Helper Key Figure for Promotion Split
a) From the IBP menu in Microsoft Excel, choose Favorites → Demand Planning.
b) Choose New View → Copy Current Sheet.
c) Change the tab name by double-clicking the name and entering Promotions.
d) Choose Edit View → Edit Planning View.
e) In the dialog box, enter the data from the table provided.
f) Choose OK.
g) Choose Favorites → Update to update your Demand Planning favorite.
2. Analyze the Promotion planning view to understand the key figures and record the current
values in the following table.


Promotion Uplift
a) The Promotion Uplift (Source) key figure is used to import promotions from an
external promotion planning system. This key figure is at the product customer level.
b) The Help Key Figure for Promotion Split takes the Promotion Lift (Source) and splits it
to location by multiplying by the Promotion Location Split key figure, which is not in
this view.
c) The Promotion Uplift (Internal key figure) is used to show the result of all of the
promotions whether or not they are active.
d) The Promotion Uplift key figure shows the result of only the active promotions or those
with IBPPROMOSTATUS = 10.
3. Run the Advanced Copy Operator Promo Split 2 Promo Uplift. To use the externally
planned promotions in our IBP demand plan, we need to execute a copy job that copies
the values of the Help Key Figure for Promotion Split to the Promotion Uplift (Internal key
figure). Then, only the values of active promotions appear in the Promotion Uplift key
figure.
a) On the Promotion tab of your Demand Planning favorite, in the Application Jobs
section, choose Run → Advanced Copy Operator.
b) Choose the Promo Split 2 Promo Uplift operator.
c) On the Filter tab, filter using Product ID attribute, choosing your HT-0## product.
d) Choose Next and Run. A reason code and comment are optional.
e) When the status of your job is Finished, in Status → Copy Operator (Advanced), go to
the next step.
4. Refresh your planning view and record the values of the key figures in the following table.

Promotion Uplift
5. Add a tab to your Demand Planning favorite called Final Forecast by copying the existing
Promotions tab. Use the data in the following table and be sure to update your Favorite.
Field Value
Time Weekly, Current week to 20 weeks in the

future

Field Value

Location ID;
Customer ID
Key Figures Consensus Demand

Promotion Uplift
a) From the IBP menu in Microsoft Excel, choose Favorites → Demand Planning.
b) Select the Promotions tab and choose New View → Copy Current Sheet.
c) Change the tab name by double-clicking the name and entering Final Forecast.
d) Choose Edit View → Edit Planning View.
e) In the dialog box, enter the data from the table provided.
f) Choose OK.
g) Choose Favorites → Update to update your Demand Planning favorite.
6. Locate a cell in which the Promotion Uplift key figure has values. Notice that Consensus
Demand = Promotion Uplift + Consensus Demand without Promotions. Now, all active
promotions are added into the Consensus Demand key figure, which becomes the final
forecast.

LESSON SUMMARY
● Plan promotions

Unit 5
Lesson 2
Creating Promotions
LESSON OBJECTIVES
Promotion Creation in IBP

You can use the Analyze Promotions app to study the promotion data that has been loaded to
SAP Integrated Business Planning from an external system, and to look behind the figures in
forecasting to learn if there was any promotional impact.
The Analyze Promotions app only shows data of the version baseline.
You can do the following:
● Check promotion data after data transfer from an external system, for example.
● Create promotions from scratch.
● Exclude promotions from forecasting, or include promotions in forecasting.
● Change the location split of promotion quantities.
● Review the promotion success.
● Add notes to a promotion.
● Share a promotion in a group on SAP Jam, and comment on a shared promotion.
● Delete promotions.
Figure 166: Create Promotions in IBP

To integrate trade promotion data in SAP Integrated Business Planning for demand, set up a
planning area that fulfills certain requirements. These requirements are then checked during
the activation of the planning area.
Note:
The SAP6 sample planning area is set up to integrate promotion data. We
recommend that you use a copy of SAP6, and adjust it to fit the business needs of
your company.
A planning area for promotion integration must meet the following requirements:
● One of the attributes in the planning area has the Promotion ID business meaning assigned
to it.
● One of the attributes of the planning area has the Product ID or Product Group ID business
meaning.
● One of the attributes in the planning area has the Product Description business meaning
assigned to it.
● One of the attributes in the planning area has the Location ID business meaning assigned
to it.
● One of the attributes in the planning area has the Promotion Source ID business meaning
assigned to it.
● The planning area contains key figures that have the Promotion Uplift and Promotion Final,
or Promotion Total and Promotion Final business meanings assigned.
Additional settings:
● Promotion Master Data Type and its attributes.
For promotions, a master data type must be available in the system.
The promotion master data type must have root attributes with the following business
meaning assigned:
- Promotion ID
- Promotion Source ID
The promotion master data type must have an attribute with the Promotion Description
business meaning.
● Planning Levels
Promotion level is a planning level. Promotion data is transferred at this planning level from
the trade promotion system. The promotion level is the base planning level of the
Promotion Uplift (Source, PROMOUPLIFT) and the Promotion Totals (PROMOTOTAL) key
figures.
The promotion level must contain root attributes that have the Promotion ID, Promotion
Source ID, and Product ID or Product Group ID business meanings assigned. The
promotion level can contain five more root attributes, each representing the customer,
customer group, product group, location, brand, and category master data, or the time
level (such as daily). If the promotion level contains root attributes that have no business
meaning assigned, the Analyze Promotions app shows data aggregated over the root

Lesson: Creating Promotions
attributes with no business meaning. You cannot set a filter based on the root attributes
with no business meaning assigned.
A planning area can have one promotion level only.
● Key figures
The following assumptions were made when the modeling of promotions was created for
SAP6:
- The planned sales lifts are loaded into SAP Integrated Business Planning. If it is not the
sales lifts but the total planned quantity that is integrated, you need to adapt SAP6
accordingly.
- The promotions are loaded into SAP Integrated Business Planning at the product/
customer/week level. If the promotions are at a different level (for example, product
group), you need to adapt SAP6 accordingly.
The following table includes the key figures that are used for promotion integration:
Key Figure ID Key Figure Name Comment
PROMOUPLIFT Promotion Uplift This key figure is used to store promotion sales
(Source) lifts as planned in the promotion planning tool and
uploaded into SAP Integrated Business Planning.
It is a stored key figure used at the promotion/
product/customer/week level. Promotions are
typically not planned at the location level, there-
fore location is not part of the planning level of this
key figure.
PROMOLOCA- Promotion Loca- This key figure is used to store split factors. Split
TIONSPLIT tion Split factors are used by the system to disaggregate
the promotion numbers at the location level. Num-
bers can be uploaded or manually changed in the
IBP Excel add-in.
PROMOSPLI- Promotion Uplift This key figure is used to store the disaggregated
TALL (internal key fig- promotion sales lift (PROMOUPLIFT) data. It is
ure) used only internally by the system because it in-
cludes all promotions. Promotions can have the
status “included” or “excluded”.
PROMOSPLIT Promotion Uplift This key figure is used to store the disaggregated
promotion sales lift data for “included” promo-
tions. This is the promotion key figure used for
planning and forecasting.
PROMOSPLI- Helper Key Figure This is a helper key figure used internally by the
THELPER for Promotion system within the promotion disaggregation proc-
Split ess.

Key Figure ID Key Figure Name Comment
PROMOBASE- Sales History This key figure is used to store values for the sales
LINE Without Promo- history with the promotion effects removed from
tions it. It is calculated by statistical means within the
promotion sales lift elimination preprocessing
step.
Naming Conventions
The following key figure IDs are mandatory when promotion data is used:
● PROMOUPLIFT
● PROMOSPLIT
● PROMOSPLITALL
The following key figure IDs can be replaced by other key figure IDs:
● PROMOBASELINE
● PROMOSPLITHELPER (if used, the copy operator needs to be adapted also)
● PROMOLOCATIONSPLIT
Figure 167: Observe the Promotion Profile
The Analyze Promotions app can be started in the following ways:

● From the SAP Fiori launchpad
To starting the app from the SAP Fiori launchpad, choose the Analyze Promotions tile in
the launchpad.
Note:
If you have set a default planning area in the User Preferences app, the Analyze
Promotions app starts with this as the planning area.
If you have saved a variant for the Analyze Promotions app, and set the variant as a default,
the app starts with the planning area in the default variant, and overrides the default
planning area set in the User Preferences app.

Lesson: Creating Promotions
● From the SAP Integrated Business Planning add-in for Microsoft Excel
Use the Promotions button in the Web Client group on the SAP IBP tab in the ribbon. The
Analyze Promotions app opens in your default browser.
If you have a default value for the planning area coming from the User Preferences app, or
from the default variant saved for the Analyze Promotions app, data from the default
planning area is displayed. Otherwise, you are prompted to select a planning area.
If you have default values for the planning area from both the User Preferences app and the
Analyze Promotions app, the system uses the default value from the Analyze Promotions
app.
LESSON SUMMARY


Unit 5
Lesson 3
Managing Past Promotions
LESSON OBJECTIVES
Promotion Management
The Analyze Promotions app allows you to calculate the success of past promotions.
Promotion success is calculated in the root periodicity of the promotion level and can only
include data that was loaded before the current period.
Before you trigger the calculation, you must select the key figure that contains the sales data
you need to determine the average number of sold items. By default, the key figure with the
Actual Sales business meaning is selected. If you select another key figure instead, the next
time you trigger a calculation, this key figure displays.
The result of the success calculation is displayed in the Promotion Success column. By
clicking the percentage value, you can navigate to the details.
● For promotions based on key figures with the Promotion Total business meaning, the
promotion success is calculated as follows:
Average number of sold items in the promotion periods divided by the average number of
sold items in the periods without promotions
● For promotions based on key figures with the Promotion Uplift business meaning, the
promotion success is calculated using the following formula:
Average number of sold items in the promotion periods minus the average number of sold
items in the periods without promotions divided by the average planned uplift.
These formulas do not require a baseline calculation.

A period without promotions is a period where no promotion exists for the relevant objects,
for example, for product and customer if product and customer are the root attributes of the
promotion level. Periods directly before and after promotions are not considered as periods
without promotions because of possible pre-dip and post-dip effects.
Promotion success is negative if fewer items are sold in promotional periods than in periods
without promotions.
Impact of Seasonality
To consider the seasonal behavior of the sales of a product, you select a specific number of
periods per season. The following prerequisites apply:
● You specify the number of periods per season in the root time level of the promotion level,
that is, the time level in which the promotion is loaded.
● If the number of periods per season is 0 or 1, seasonality is not considered.

● If the number of periods per season is greater than 1, only those past periods in the sales
key figure are used for the calculation of the average number of sold items in un-promoted
periods that fit to the given seasonality.
Impact of Trends
To calculate promotion success, the system uses an algorithm with exponential smoothing
for calculating the average number of sold items in periods without promotions. Only periods
before the promotion in question are considered for calculating the average. Using this
strategy, you take trends into account that could be observed before the promotion took
place. The periods closer to the promotion are given more weight in the exponential
smoothing algorithm than the periods further in the past.
The smoothed average is calculated as follows:
At = At-1 + (SF * (Pt - At-1))

SF = 2 / (n+1)
At is the average at a certain point in time.

Pt is the sales value at a certain point in time.
SF is the smoothing factor.
Note:
● The assumption in the SAP6 modeling of promotions is that the planned Uplifts
are integrated/loaded into IBP. In the case that the total planned quantity and
not the uplift is integrated, the SAP6 model needs to be adapted accordingly.
● The assumption in the SAP6 modeling of promotions is that the promotions
are integrated/loaded into IBP at the Product/Customer/Calendar Week level.
In the case that the promotions are at a different level (for example, product
group), the SAP6 modeling needs to be adapted accordingly.
Figure 168: Managing Past Promotions

Lesson: Managing Past Promotions
Promotion Sales Lift Elimination

Another possible option related to promotions in IBP is the management of past promotions.
You can do this with the help of the Pre-processing step in the Manage Forecast Model app.
The algorithm is called Promotion Sales Lift Elimination.
This algorithm can be used to identify positive outliers (sales lifts) associated with
promotions, and to remove them from the sales history. For example, you can set up a
forecast model in which promotion sales lifts are eliminated from the sales history before the
demand sensing algorithm calculates the short-term forecast.
Note:
Promotion sales lift elimination is only possible if the sales key figure and the
promotion key figure are stored in days or weeks. If you use any other periodicity
in the forecast model, promotion sales lift elimination is disabled.
Process
The system executes the following steps to eliminate promotion sales lifts:
1. Identifies outliers in the sales history key figure that you selected as the input for the
algorithm.
The outlier detection logic is the same as the one used by the outlier correction algorithm,
while the multiplier may be different.
2. Identifies sales lifts caused by promotions in the sales history key figure that you selected
as the input for the algorithm.
3. Searches for correlations between the two types of input, therefore identifying the periods
when the outliers were caused by promotions.
4. Removes the outliers associated with promotion sales lifts from the sales history using the
following formula:
Key Figure to Save Result In = Sales History * [Consensus Forecast / (Consensus

Forecast + Planned Sales Lifts)]
5. Looks for the closest matches to adjust the values proportionally whenever there is no
exact correlation between the promotion sales lifts and the outliers.
Note:
For settings that require the selection of a key figure, the fields are filled in
automatically if a key figure with the relevant business meaning is available in the
selected planning area.
LESSON SUMMARY


Unit 5
Learning Assessment
1. When leveraging IBP Promotion Planning functionality, what elements of standard

planning area SAP 6 should you be considering?
X A Promotion related key figures
X B Specific Promotion Master Data
X C Planning Levels
X D Time Profiles


UNIT 6 Demand Plan Release
Lesson 1
Using Financial Key Figures and Pricing 180
Exercise 12: Convert Quantities to Financial Figures 183
Lesson 2
Releasing a Demand Plan 187
Exercise 13: Release a Demand Plan 189
Lesson 3
Measuring Forecast Performance 192
Exercise 14: Measure Forecast Performance 197
Lesson 4
Using Analytics and Dashboards 201
Lesson 5
Using Snapshots 206
Exercise 15: Work with Snapshots 209
UNIT OBJECTIVES
● Use financial key figures

● Release a demand plan
● Measure forecast performance
● Use analytics and dashboards
● Use snapshots

Unit 6
Lesson 1
Using Financial Key Figures and Pricing
LESSON OBJECTIVES
Financial Key Figures

When sales managers are to review and agree on the forecast, we may want to convert the
quantities into financial key figures such as revenue. IBP allows for fast quantity-to-currency
conversion. IBP also support different currencies using an exchange rate.
Figure 169: Financial Key Figures (1 of 2)
Animation: Financial Key Figures (1 of 2)

For more information on Financial Key Figures (1 of 2), please view the animation
in the lesson Using Financial Key Figures and Pricing, online in the SAP Learning
Hub.
In a standard predefined IBP planning area for Demand planning processes, we have the
following key figures that are used to show the quantities in monetary equivalent:
● Actuals Revenue (ACTUALSREV)
Used to store the actual revenue data that you upload. Since this key figure is currency-
dependent, it models how currency conversion works in SAP Integrated Business
Planning.
● Actuals Price (ACTUALSPRICE)

Lesson: Using Financial Key Figures and Pricing
Used to store the calculated price based on the ACTUALSREV and ADJDELIVQTY key
figures. No separate currency conversion is modelled because the conversion is already
done for the input key figure ACTUALSREV.
● Statistical Forecast Price (STATISTICALFCSTPRICE)
Used to store price information mainly for future periods. You can forecast the price using
a statistical forecasting method, but you can also enter or upload it manually. Since this
key figure is currency-dependent, it models how currency conversion works in SAP
Integrated Business Planning.
● Sales Forecast Price (SALESFCSTPRICE)
Used to store calculated price information. It is equal to ACTUALSPRICEm, if
ACTUALSPRICE is not NULL. Otherwise, it is equal to STATISTICALFCSTPRICE. Past
periods are equal to ACTUALSPRICE and future periods are equal to the forecasted or
estimated price. No separate currency conversion is modelled because the key figure
equals another converted-price key figure.
● Sales Forecast Revenue (SALESFCSTREV)
Used to store the calculated revenue based on SALESFCSTQTY and SALESFCSTPRICE.
● Consensus Demand Plan Revenue (CONSENSUSDEMANDREV)
Used to store the calculated revenue based on CONSENSUSDEMAND and
SALESFCSTPRICE.
● Marketing Forecast Revenue (MARKETINGFCSTREV)
Used to store the calculated revenue based on MARKETINGFCSTQTY and
SALESFCSTPRICE.
Other required key figures can be created to cover additional processes that may exist in
customer business processes.
Figure 171: Financial Key Figures (2 of 2)

Unit 6: Demand Plan Release

Unit 6
Exercise 12
Convert Quantities to Financial Figures
Simulation: Convert Quantities to Financial Figures

For more information on Convert Quantities to Financial Figures, please view the
simulation in the lesson Using Financial Key Figures and Pricing online in the SAP
Learning Hub.
Converting quantities to financial figures can be very beneficial to sales and marketing people
who work with budgets and revenues. Real-time conversion is supported by IBP for Demand,
and is explored in this exercise.
1. Log on to the Excel UI, choose your planning view favorite, edit it by deselecting all key
figures, and choose the following three new settings. Save this view as a new favorite
called Demand Revenue.
Selection Value
Time Setting Weekly
Key Figures Consensus Demand without Promotions, Statisti-

cal Forecast Price, and Consensus Demand Plan
Revenue
Currency USD
2. Observe how the price influences the Consensus Demand Revenue calculations.
3. Observe how key figure calculations are configured using the SAP Fiori UI.

Unit 6
Solution 12
Convert Quantities to Financial Figures
Simulation: Convert Quantities to Financial Figures

For more information on Convert Quantities to Financial Figures, please view the
simulation in the lesson Using Financial Key Figures and Pricing online in the SAP
Learning Hub.
Converting quantities to financial figures can be very beneficial to sales and marketing people
who work with budgets and revenues. Real-time conversion is supported by IBP for Demand,
and is explored in this exercise.
1. Log on to the Excel UI, choose your planning view favorite, edit it by deselecting all key
figures, and choose the following three new settings. Save this view as a new favorite
called Demand Revenue.
Selection Value
Time Setting Weekly
Key Figures Consensus Demand without Promotions, Statisti-

cal Forecast Price, and Consensus Demand Plan
Revenue
Currency USD
a) Log in to the Excel User Interface with the login credentials provided by the instructor.
b) In the Planning View section, choose Favorites → Demand Planning.
c) Choose edit view, deselect all key figures, and choose the following three new key
figures: Consensus Demand without Promotions, Statistical Forecast
Price, and Consensus Demand Plan Revenue.
d) Select the currency USD.
e) Save the view as a new favorite called Demand Planning Revenue.
2. Observe how the price influences the Consensus Demand Revenue calculations.
a) Change the price to 10 in the key figure Statistical Forecast Price four weeks
from now and choose Simulate.
b) Observe that the key figure Consensus Demand Revenue has now be calculated.
3. Observe how key figure calculations are configured using the SAP Fiori UI.

Lesson: Using Financial Key Figures and Pricing
instructor.
b) Choose the app Configuration and go to the Key figure tab.
c) Choose planning area ZSAP6 and review the calculation on key figure
CONSENSUSDEMANDREV.

LESSON SUMMARY

Unit 6
Lesson 2
Releasing a Demand Plan
LESSON OBJECTIVES
Demand Plan Release

In an end-to-end process, the final demand plan can be released to Supply planning
processes in two separate ways:
1. Release to Consensus Demand Quantity key figure

Consensus Demand Quantity key figure in IBP for Supply is considered by the supply
planning algorithms as an input. Customer Source relationship needs to be maintained as
master data. Heuristics and optimizer utilities will resolve demand sourcing for different
customers using different logic.
Figure 173: Consensus Demand Key Figure Configuration
2. Release to Independent Demand Quantity key figure

In this case, the Independent Demand Quantity key figure in IBP for Supply is at the Week-
Product-Location planning level. This means that customer source master data elements
are not necessary.
In the standard planning area, there are no key figures that can be used in the Supply
planning engine. This is relevant only for an SAP IBP1 planning area, which is used for an
end-to-end process.
To release a demand plan in IBP, we can use the functionality of the Advanced Copy Operator:
1. The new Advanced Copy Operator...
● Covers all features of the old copy and disaggregation operator (and a little more).
● Can be used in a more flexible way.

● should be competitive with respect to performance
● Can be set up in a user-friendly way using the Copy Operator Profiles app.
Figure 174: Advanced Copy Operator

Unit 6
Exercise 13
Release a Demand Plan
Simulation: Release a Demand Plan

For more information on Release a Demand Plan, please view the simulation in
the lesson Releasing a Demand Plan online in the SAP Learning Hub.
In an end-to-end process, the final demand plan must be released to Supply planning
processes.
1. Release your demand plan with Advanced Copy operator.

Unit 6
Solution 13
Release a Demand Plan
Simulation: Release a Demand Plan

For more information on Release a Demand Plan, please view the simulation in
the lesson Releasing a Demand Plan online in the SAP Learning Hub.
In an end-to-end process, the final demand plan must be released to Supply planning
processes.
1. Release your demand plan with Advanced Copy operator.

a) Log in to the Excel UI with the login credentials provided by your instructor.
b) Create a new planning view using the Demand Planning Quantities template, apply your
Prod ## filter, and select only the following key figures:
● Consensus Demand without Promotions
● Demand plan (released)
c) Choose OK.
d) Choose run Copy operator (Advanced).
e) In the Application Jobs section, choose Run → Copy Operator (Advanced)
f) Select operator Consensus 2 Demand Plan
g) Select UOM to ID KG.
h) Select your filter.
i) Choose Next.
j) Choose Run.
k) Check the log for the status of the execution.
l) Refresh the data view and see that the values of Consensus Demand without
Promotions key figure were copied to Demand Plan (Release) key figure in the current
and future periods.
You see that all the values were copied into the target key figure.

Lesson: Releasing a Demand Plan
LESSON SUMMARY

Unit 6
Lesson 3
Measuring Forecast Performance
LESSON OBJECTIVES
Forecast Performance Measurement
Figure 176: Business Goals of Forecast Error Calculation
Animation: Business Goals of Forecast Error Calculation

For more information on Business Goals of Forecast Error Calculation, please
view the animation in the lesson Measuring Forecast Performance, online in the
SAP Learning Hub.
Depending on the use cases, there are three different basic scenarios for business goals of
forecast error calculation.

Lesson: Measuring Forecast Performance
Figure 178: Key Figures Related to Forecast Error Calculation General Remarks
Take note of the items given in the figure to be aware of the prerequisites for a default SAP6
usage.
Figure 179: Key Figures Related to Forecast Error Calculation Key Figure Description
Animation: Key Figures Related to Forecast Error Calculation Key Figure

Description
For more information on Key Figures Related to Forecast Error Calculation Key
Figure Description, please view the animation in the lesson Measuring Forecast
Performance, online in the SAP Learning Hub.
Several key figures are related to forecast error calculation in both statistical forecasting and
demand planning.

Figure 181: Key Figures Related to Forecast Error Calculation Key Figure Description
Animation: Key Figures Related to Forecast Error Calculation Key Figure

Description
For more information on Key Figures Related to Forecast Error Calculation Key
Figure Description, please view the animation in the lesson Measuring Forecast
Performance, online in the SAP Learning Hub.
Several key figures are related to forecast error calculation in the area of sensed demand.
Forecast error calculations help you gain insight into the forecasting accuracy of the planning
areas that you are responsible for.
As a demand planner, you can use this information to monitor your company's forecasting
performance, as follows:
● Compare different forecast key figures to see which key figure provides the best value for
your forecast.
● Find areas where forecasting accuracy needs to be improved.
● Calculate forecast accuracy at any aggregate planning level.
Define the appropriate forecast accuracy goals for various types of products, for example,
products with least volatile demand, or highest sales.
Figure 183: Difference Between the Error Measure Calculations
Difference Between the Error Measure Calculations

The error measures for which you set up calculations in the Manage Forecast Error
Calculations app are also calculated during forecasting, therefore the following question may
arise. What is the difference between the error measures calculated in forecasting and the
error measures calculated in the Manage Forecast Error Calculations app?
The formulas that the system uses for calculating the error measures are the same, but
because the business purpose for which you use the calculated error measures is different,
the set of data that serves as the basis for the calculations is also different, and so on.
Basic Concepts in Forecast Error Calculations

● Planning Level
A planning level enables you to analyze data and plan at a specific aggregation level.
For example, the PRODCUST planning level is the level for product-customer, and allows
for data analysis that is tied to both the product and the customer and their attributes, or
attributes that are specific to product and customer combinations.
Key figures (either stored or calculated) are defined for the base planning level, which can
be different from the level that you usually view the key figure at. Forecasting requires that
historical data is available in a key figure whose base planning level defines the lowest
granularity on which the historical data is available. Forecasting can be done at more
aggregated levels as well. If you usually forecast at a certain level, such as product, group,
and country, you will want to measure forecasting performance at this level. You can do so
by creating various forecast accuracy metrics as calculated key figures defined for your
preferred planning level.
● Lag
Lags represent the number of periods between the current period (the period in which the
forecast is created) and the forecasted period (the period for which the forecast is
calculated).
Lag is defined as follows:
- A lag 0 forecast means the forecast calculated in week 1 for week 1.
Once a demand forecast is created, the lag x version of the forecast for a certain period
refers to the forecast that was generated for that period, x periods ago.
You can use this information to monitor the evolution of the forecast. You can compare the
forecasting results of various lags with the actual numbers to see how accurate your
forecast was for the specific lags.
The forecast is updated over time. Therefore, it is necessary that you save the forecasting
data for the lags that you want to compare. You can do this using the appropriate Copy
operator.
Time Settings
Forecast error measures are calculated from the sales history and the forecasting data of
previous or future periods or both. When you set up profiles for forecast error calculation, you
can define how many historical or future periods should be considered in the calculation.
The point of reference for all time settings is “Now”, which is the current period. If the
periodicity is set to Monthly, and the current month is October, then “Now” is equal to
October.
Note:
“Now” is considered to be part of the future so it is not included in the calculation
horizon when the time scope is the past.


Unit 6
Exercise 14
Measure Forecast Performance
Simulation: Measure Forecast Performance

For more information on Measure Forecast Performance, please view the
simulation in the lesson Measuring Forecast Performance online in the SAP
Learning Hub.
1. Create a forecast error calculation profile.
2. Calculate the forecast error.
3. Check the results with the Analytics app.

Unit 6
Solution 14
Measure Forecast Performance
Simulation: Measure Forecast Performance

For more information on Measure Forecast Performance, please view the
simulation in the lesson Measuring Forecast Performance online in the SAP
Learning Hub.
1. Create a forecast error calculation profile.

a) Log on to the SAP Fiori Web UI.
b) In the Demand Planner section, choose the Manage Forecast Error Calculations
Demand Planning tile, and choose New.
c) Enter Forecast_Error_## as both the profile name and the description.
d) Choose ZSAP6 as a planning area and LOCPRODCUSTMONTHLY as the planning level.
e) In the Groups of Forecast Error Measures section, choose Add.
f) Enter Forecast_Error_## as the name.
g) Choose Actuals Qty as the Sales History Key Figure and Statistical forecast
qty as the Forecast Key Figure. Choose KG as the UOM to ID.
h) Choose Past as a Time Scope and enter a Calculation Horizon of 12 Monthly

periods.
i) In the Output settings section, choose LOCPRODCUST in the Planning Level of Output
Key Figures.
j) As the necessary Measures to Calculate, choose Forecast Error Measures -

Mean Absolute Percentage Error (MAPE) and assign the relevant key figure
Model Fit Error: MAPE.
k) Choose Add and then choose Save.
2. Calculate the forecast error.

a) Log on to the SAP Fiori Web UI.
b) In the Application Jobs section, choose Create.
c) Select Forecast Error Calculation Operator, as the job template.
d) Proceed thru Step 2 of the Wizard
e) In Step 4 of the wizard, select planning area ZSAP6 and your profile
Forecast_Error_##.

f) Select Version Baseline and use your filter.
g) Select Schedule.
h) Monitor progress of your job.
3. Check the results with the Analytics app.

a) In the General Planner group, choose the Analytics Advanced tile.
b) Choose Create → Analytics Chart.
c) Choose the ZSAP6 planning area.
d) Enter Forecast error ## as the name and description.
e) Choose Model Fit Error: MAPE as the key figure.
f) Group by Product ID, Location ID, and Customer ID.
g) Choose KG as the UoM To value.
h) In the filter at the top, choose all your products that end with ##.
i) Choose Run.
j) Observe the results and choose Save.

LESSON SUMMARY

Unit 6
Lesson 4
Using Analytics and Dashboards
LESSON OBJECTIVES
Analytics and Dashboards

SAP Integrated Business Planning enables you to analyze and visualize your data in the form
of charts, and to collect the charts that you are most interested in on a dashboard so that they
are always at hand.
Figure 185: Analytics and Dashboards Overview
Analytics
With the Analytics – Advanced app, you can create charts, such as bar charts, pie charts, or
heat maps, as well as create drill-downs to explore data more deeply. You can save your
charts so that you can easily add them to a dashboard, as well as share them with other users.
You can also view charts created in other apps, such as custom alert charts.
Key Features:
● Create analytics charts
● Drill-down into data sets
● Share charts
● Manage lists of your charts and charts shared with you

Supported Device Types:

● Desktop
● Tablet
● Smartphone
Additional restrictions with analytics:

● You can share charts that you have created with other users, and optionally inform them
by e-mail that you've shared the chart.
● By default, charts in the list are sorted in alphabetical order by name.
● You cannot delete charts that are shared with you, you can only delete your own charts.
● You can change ownership of analytics using Content Administration app.
● By default, as you modify your selections for the chart (for example, add key figures or
choose a chart type), the chart refreshes. If you are changing many elements, it can take
some time for each refresh to complete. If you do not want the chart to automatically
refresh when you change elements, you can pause the auto-refresh feature.
● You can export the data from an analytics chart to Excel, but for this feature to work
properly, you must be using the add-in for Microsoft Excel that corresponds to your
current release. This feature does not support descriptive attributes.
Drill-downs are relationships between charts that allow you to further analyze data at a more
granular level. You can create relationships between your charts, which allow you to drill down
further into your data. When you click a level in your chart, that level becomes the filter for the
next chart. For example, if your chart shows the Consensus Demand Plan Quantity for
customers 1 and 2, you can drill down into customer 1 to show the Consensus Demand Plan
Quantity or any other key figure by location for that customer.
Note:
When you create a drill-down chart, you can pass all or a subset of group by
attributes. The selected filters on the current chart are passed down to the drill-
down chart by default, but you can change them.
Different sets of data are suited to a specific analytics chart types.

The following list is a subset of types of charts available for selection. New chart types are
added regularly.
● Bar
A chart that illustrates comparisons along individual items. Categories are organized along
the vertical axis, and values along the horizontal axis. Use this chart when you have one or
more data series to plot; data contains positive, negative, and zero values; you want to
compare data for multiple categories. The displayed values are durations.
● Column
Column charts compare values across categories. In a column chart, the categories are
typically organized along the vertical axis, and the values along the horizontal axis.
● Dual X-Axis Bar

Lesson: Using Analytics and Dashboards
Allows you to compare data sets that have different units of measure. This chart type is
used for comparing trends or relationships between two variables (for example, key
figures), which may have different magnitudes and scales of measurement.
● Dual Y-Axis Column
Allows you to compare related sets of values when they are associated with different
magnitudes and scales of measurement.
● Heat Map
A graphical representation of data where the individual values contained in a matrix are
represented as colors. Fractal maps and tree maps both often use a similar system of
color coding to represent the values taken by a variable in a hierarchy.
● Table
An ordered arrangement of data in rows and columns, used for displaying multiple
records.
● Line
A line chart displays data as a series of points connected by a line. This type of chart is best
suited for showing data for a large number of groups (for example, total sales over the past
several weeks).
● Dual Y-Axis Line
Used for comparing trends or relationships between two variables (for example, key
figures) that may have different magnitudes and scales of measurement. This chart type is
useful when you have limited real estate and you want to quickly establish the relationship
between two variables.
● Combination
This chart combines the features of the bar chart and the line chart. The combination chart
displays the data using a number of bars and/or lines, each of which represent a particular
category. A combination of bars and lines in the same visualization can be useful when
comparing values in different categories, since the combination gives a clear view of which
category is higher or lower.
● Dual Y-Axis Combination
The combination chart is a visualization that combines the features of the bar chart and
the line chart. The combination chart displays the data using a number of bars and/or
lines, each of which represent a particular category. A combination of bars and lines in the
same visualization can be useful when comparing values in different categories, since the
combination gives a clear view of which category is higher or lower. An example of this can
be seen when using the combination chart to compare the projected sales with the actual
sales for different time periods.
● Dual X-Axis Combination
The combination chart is a visualization that combines the features of the bar chart and
the line chart. The combination chart displays the data using a number of bars and/or
lines, each of which represent a particular category. A combination of bars and lines in the
same visualization can be useful when comparing values in different categories, since the
combination gives a clear view of which category is higher or lower. An example of this can
be seen when using the combination chart to compare the projected sales with the actual
sales for different time periods.

● Pie/Donut
A pie chart displays data as a pie, split and filled with color or patterns. Pie charts are
typically used for one group of data (for example, the percentage of consumption for an
asset). However, you have the option to choose multiple pie charts for multiple groups of
data.
A donut chart is similar to a pie chart, displaying data as sections of a donut shape.
● Stacked Column/Stacked Bar
A stacked bar chart displays data as a series of vertical bars. This type of chart is best
suited for representing two or more series of data, each series represented by a color
stacked in a single bar.
● Scatter
A chart that displays values for a set of data. The data is displayed as a collection of points,
each having the value of one variable determining the position on the horizontal axis and
the value of the other variable determining the position on the vertical axis.
● Choropleth
A world map where data is represented by location, as circles or bubbles. This chart is not
enabled if there is no latitudes and longitude associated with you master data location.
● Waterfall Chart with Time Dimension
A waterfall chart with time period is a new chart type that can show you how an initial value
is impacted by intermediate values — either positive or negative — and results in a final
value.
Dashboards
The Dashboards – Advanced app enables you to view consolidated status data about your
business at a glance. You can create, manage, and view dashboards. A dashboard shows all
the charts that you are most interested in. You can flexibly add charts, customize the layout of
your dashboard, and share it with other users or user groups.
Key features include the ability to:
● Create dashboards
● Display dashboards
● Display charts of different categories
● Execute drilldowns
● Share dashboards
● Manage lists of your dashboards and dashboards shared with you
Supported device types are:

● Desktop
● Tablet
● Smartphone
Additional features of dashboards:

Lesson: Using Analytics and Dashboards
● You can delete any dashboard that you created, even if you have shared the dashboard
with other users or user groups.
● You can use categories to group your dashboards. It is useful to group dashboards for
different purposes like demand planning dashboards or supply planning dashboards.
Categories must first be created in the Manage Categories app. Another way of grouping
your dashboards is by marking the dashboards favorites.
● In the View Settings menu, you can sort your dashboards by the columns shown in the list
in ascending or descending order.
● If you want to remove a dashboard that has been shared with you from the Dashboard List,
you can opt out of it to do so. If you opt out of a dashboard that was shared with you, you
cannot be able to access it and you will need to ask your colleague to share it with again to
add it back to your list.
● You can share your dashboard with other SAP Integrated Business Planning (SAP IBP)
users or user groups that have been created by your system administrator.
LESSON SUMMARY

Unit 6
Lesson 5
Using Snapshots
LESSON OBJECTIVES
● Use snapshots
Snapshots
During the demand review meeting, demand planners require a quick way to review and
analyze how the plan has changed over time in the past and is likely to change in the future.
The plan can be a Demand Plan, Financial Plan, and so on. To evaluate how the plan has
evolved over time, it is necessary to archive the plan in each S&OP planning cycle. The trigger
to archive or take a snapshot can be at the end of each S&OP planning cycle or whenever the
plan is finalized in the typical (Monthly) S&OP cycle.
The Key Figure snapshots or archives in S&OP can be used to create Waterfall reports as
shown in the figure, Snapshot Key Figures.
Figure 186: Snapshot Key Figures
To check how key figure values have evolved over time, you can capture and compare
multiple historical snapshots of a key figure. The key figure values captured by a snapshot are
stored in a snapshot key figure, which is displayed in your planning view in Excel along with
your other key figures. The name of a snapshot key figure is made up of the key figure name
and additional information to show that this key figure is a snapshot key figure.
What is the difference between snapshots and the change history? A snapshot captures key
figure values at a particular point in time, that is, when you run the snapshot operator in the
IBP Excel add-in. The change history functionality (which is not the same as the Change
History snapshot type) automatically keeps track of all changes to a key figure enabled for the
change history, without the need to run a planning operator.
1. Key figure snapshots (Original type) - for general forecasting purposes

Lesson: Using Snapshots
The snapshot definition includes the following information:
● One or more key figures that are to be captured in the snapshot.
● A suffix that is used to identify the snapshot key figures.
● The number of snapshots that can be taken of each key figure (a maximum of nine is
allowed).
● The time range for the snapshot (for example, for the next 6 periods starting with the
current period).
Each snapshot definition that the configuration expert creates is automatically assigned to
the snapshot operators (Snapshot operator and Redo Snapshot operator).
Taking and Redoing Original Snapshots:
You take snapshots in the IBP Excel add-in by running the Snapshot operator. If the
snapshot contains errors or incorrect data, you can retake it using the Redo Snapshot
operator.
Example:
After you have taken a snapshot of a key figure such as Customer Demand
(CONSENSUDEMAND), the key figure amount for a particular month is changed, as
decided in the monthly S&OP planning process. To capture this agreed amount and
discard the snapshot containing the previously agreed amount, you can use the Redo
Snapshot operator. It overwrites only the latest version of the snapshot.
You can also schedule these operators to run periodically as background jobs.
Note that the following snapshot settings are predefined in the configuration of the
snapshot and cannot be changed when you run the operators in Excel:
● Time range for the snapshot
● Key figures that are to be captured in the snapshot
You can take up to nine snapshots of a key figure, producing a time-elapsed view of your
data. To identify a snapshot key figure, a suffix (for example, SN) and a number are added
to the key figure's technical name. The most recent snapshot is numbered 1. When a new
snapshot is created, the number of the previous snapshot is increased by 1.
2. Lag-based snapshots - mostly for demand sensing, but also suitable for other planning
purposes
Lag-based snapshots are used for demand sensing and other planning purposes. The
snapshots are taken of selected planning objects with predefined lags and saved in a key
figure that has Lag as a root attribute at its base planning level.
Lags represent the number of periods between the period in which the forecast is created
and the period for which the forecast is calculated. For example, a forecast that is
calculated in week 1 for week 3 is a lag 2 forecast.

Note:
When configuring lag-based snapshot, you have to satisfy the requirements for
the Special Key Figures. These are technical key figures, that are necessary to
manage unit of measure conversions when lags are being created. They are
not exposed to the end user in planning views.
The lag-based key figure attribute allows you to save only the snapshots that are relevant
for your business process, which can be useful in statistical forecasting (for example, with
monthly periodicity), in demand sensing (with calendar week periodicity), and in inventory
optimization.
For example, you can take snapshots of the Statistical Forecast Quantity key figure using
the monthly lags 1, 3, and 6, or compare the accuracy of demand forecasts with the daily
lags 2, 3, and 4. For demand sensing, typically all weekly lags are required starting from
lag 0.
To allow you to take a snapshot from the SAP IBP Excel add-in using the Application Jobs
app and using the corresponding snapshot job, the configuration expert must first define
the required snapshot in Manage Lag-Based Snapshots app.

Unit 6
Exercise 15
Work with Snapshots
Simulation: Work with Snapshots

For more information on Work with Snapshots, please view the simulation in the
lesson Using Snapshots online in the SAP Learning Hub.
1. Create a new tab in your Demand Planning favorite in Microsoft Excel, using the data from
Field Value
Time Weekly, 10 weeks in the past to 10 weeks in the

future
Planning Level Product ID,

Location ID,
Customer ID
Key Figures Consensus Demand without Promotions

Consensus Demand without Promotions Snapshot 1
Filter Prod ##
2. Name the new tab Snapshots and update your favorite.
3. Execute the snapshot operator from the Excel menu for your Prod ## filter.
4. Change Consensus Demand Qty to 2000 for the first two weekly buckets and save the
changes. Run the snapshot from the SAP Integrated Business Planning ribbon in
Microsoft Excel.
Note:
Consensus Snapshot 2 gets its values from Consensus Snapshot 1.
Consensus Snapshot 1 gets its values from Consensus Demand Qty.

Unit 6
Solution 15
Work with Snapshots
Simulation: Work with Snapshots

For more information on Work with Snapshots, please view the simulation in the
lesson Using Snapshots online in the SAP Learning Hub.
1. Create a new tab in your Demand Planning favorite in Microsoft Excel, using the data from
Field Value
Time Weekly, 10 weeks in the past to 10 weeks in the

future
Planning Level Product ID,

Location ID,
Customer ID
Key Figures Consensus Demand without Promotions

Filter Prod ##
a) Log on to the SAP Integrated Business Planning add-in for Microsoft Excel and open
your Demand Planning favorite.
b) To create a new tab, choose New View → Copy Current Sheet.
c) Choose Edit View → Edit Planning View and enter the data provided in the table for this
exercise step.
d) To view the report, choose OK.
2. Name the new tab Snapshots and update your favorite.

a) Double-click the new tab and enter Snapshots as the name.
b) Choose Favorites → Update to save your changes.
3. Execute the snapshot operator from the Excel menu for your Prod ## filter.
a) In the

Lesson: Using Snapshots
b) In the Application Jobs section of SAP IBP ribbon in Microsoft Excel, choose Run
→ Snapshot.
c) Choose Planning Operator: CONSDEMANDSNAP.
d) Choose Base Version.
e) Choose Next, and choose Run.

A Reason Code is not required.
f) A popup window displays to indicate that the job was scheduled successfully. Choose
OK to close the window.
g) Choose Snapshot → Status to see if the operator is completed.
h) To see your results, refresh the planning view.
4. Change Consensus Demand Qty to 2000 for the first two weekly buckets and save the
changes. Run the snapshot from the SAP Integrated Business Planning ribbon in
Microsoft Excel.
Note:
Consensus Snapshot 2 gets its values from Consensus Snapshot 1.
Consensus Snapshot 1 gets its values from Consensus Demand Qty.
a) Change Consensus Demand Qty to 2000 for the first two weekly buckets.
b) Choose Save.
c) In the SAP Integrated Business Planning ribbon in Microsoft Excel, choose

Snapshot → Run.
d) Choose Profile: Consensus Demand Snapshot.
e) Choose Baseline Scenario.
f) Choose Next and choose Run.
g) A popup window displays to indicate that the job was scheduled successfully. Choose
OK to close the window.
h) Choose Snapshot → Status.
i) Refresh the planning view to see your results.

LESSON SUMMARY
● Use snapshots

Unit 6
Learning Assessment
1. What are the different ways to release final Demand Plan to Supply Planning?
X A Release to Consensus Demand Qty Key Figure
X B Release to Global Demand Qty Key Figure
X C Release to Independent Demand Qty Key Figure
X D All of the above.


UNIT 7 Forecast Accuracy
Lesson 1
Using ABC and XYZ Segmentation 217
Lesson 2
Using Time Series Analysis 224
Exercise 16: Use Time Series Automation Analysis 227
Lesson 3
Setting up Alerts for Forecast Accuracy 231
Lesson 4
Performing Analysis in the SAP Fiori Web UI and the Excel UI 237
Lesson 5
Tailoring Your Forecasts 241
UNIT OBJECTIVES
● Use ABC and XYZ segmentation

● Use time series analysis
● Set up alerts for forecast accuracy
● Perform analysis using the SAP Fiori Web UI and the Excel Add-in UI
● Tailor your forecasts

Unit 7: Forecast Accuracy

Unit 7
Lesson 1
Using ABC and XYZ Segmentation
LESSON OBJECTIVES
ABC and XYZ Segmentation

ABC/XYZ segmentation is the method of grouping planning objects based on the values of a
selected key figure. The two types of segmentation serve different purposes as follows:
● ABC segmentation is the prioritization of planning objects based on their relative
importance.
For example, you may want to categorize the combinations of product and customer
based on the revenue key figure.
● XYZ segmentation is the classification of planning objects based on their demand volatility.
For example, you may want to categorize the combinations of product and location based
on the confirmed quantity key figure.
Figure 188: ABC and XYZ Analysis Overview
Animation: ABC and XYZ Analysis Overview

For more information on ABC and XYZ Analysis Overview, please view the
animation in the lesson Using ABC and XYZ Segmentation, online in the SAP
Learning Hub.

Segmentation helps you define more specific alerts and reports and generate more accurate
results for demand planning and inventory planning. Among others, segmentation allows you
to do the following:
● Tailor your forecast strategy and inventory optimization to the characteristics of segments
● Assign more-appropriate forecast models to planning objects
● Analyze forecast accuracy by product segments
● Identify planning objects with a relatively high or relatively low level of forecastability
● Identify inventory items that require closer attention
● Define alerts for specific segments only
● View analytic charts with regards to specific segments
Figure 190: ABC and XYZ Analysis Usage/Importance Versus Variance
ABC Segmentation
ABC segmentation is the prioritization of planning objects based on their relative importance.
The calculation is performed as follows:
● For each planning object, the system calculates the total value of the segmentation
measure, which is a selected key figure, for the selected segmentation period. For
example, it calculates that PROD01 produced a total revenue of USD 51000 during the last
10 weeks.
● The system sorts the planning objects in decreasing order of the calculated total values.
For example, the planning object that produced the most revenue in the last 10 weeks is
moved to the first place.
● The system uses the selected segmentation method and the predefined thresholds to
assign the sorted items to segment A, B, or C.
Segmentation methods:
● By Pareto Principle (Sorted and Cumulated %)

Lesson: Using ABC and XYZ Segmentation
This method is based on the application of the Pareto principle on a set of planning objects
within a specific time horizon. The Pareto principle or 80/20 rule states that for many
events, roughly 80% of the effects come from 20% of the causes. The goal is to rank
products or other planning objects in order to identify those that contribute the most and
the least to the overall value of the segmentation measure (for example, revenue) in
percentage. Therefore, all items are assigned to A, B, and C segments in the descending
order of their relative importance. Note that the sum of the percentages that are used to
define the thresholds must always be 100%.
Note:
Zero and negative values are automatically assigned to the last segment.
● By Pareto Principle (Sorted and Cumulated Values)

This method is based on the application of the Pareto principle on a set of planning objects
within a specific time horizon. The Pareto principle or 80/20 rule states that for many
events, roughly 80% of the effects come from 20% of the causes. The goal is to rank
products or other planning objects in order to identify those that contribute the most and
the least to the overall value of the segmentation measure (for example, revenue) in
absolute value. Therefore, all items are assigned to A, B, and C segments in the descending
order of their relative importance.
● By Number of Items (Sorted %)
If you choose this method, the system calculates the segments based on the relative
number of items that produce various shares of the segmentation measure.
● By Number of Items (Sorted Values)
If you choose this method, the system calculates the segments based on the number of
items that produce various shares of the segmentation measure.
● By Segmentation Measure (Single Values)
If you choose this method, the segments are calculated based on the total value produced
by each item in terms of the segmentation measure. The sums are compared one-by-one
to the predefined thresholds.
XYZ Segmentation
XYZ segmentation is the classification of planning objects based on their demand volatility,
which can be established using two different calculation strategies: Calculate Variation and
Aggregate over Periods.
The main difference between the two strategies is that Calculate Variation calculates the
variance values during the segmentation runs, while Aggregate over Periods works with
values that were previously calculated by other tools such as the Manage Forecast Error
Calculations app.
● Calculate Variation
If you choose this calculation strategy, the system evaluates the fluctuations in the
historical demand or consumption during each segmentation run and classifies planning
objects based on their regularity or propensity for planning.
The following calculation methods are available for this purpose:

- Coefficient of Variation (CV)

If you choose this method, the system assigns each item to various segments based on
their coefficient of variation, which is the standard deviation divided by the
mathematical mean value for a specific time frame:
In the formula above, σ is the standard deviation and X̅ is the mathematical mean.
- Coefficient of Variation Squared (CV Squared)
If you choose this method, the system divides the square of the deviation with the
square of the mean, getting CV squared as a result. CV squared is considered more
convenient than CV for evaluating demand fluctuation.
Consider Results of Time Series Analysis

When forecast automation is run in the Application Jobs app, the system analyzes the time
series values stored in the selected input key figure and saves the identified properties in
the background. If you select Consider Results of Time Series Analysis for XYZ
segmentation, the system will automatically use the analysis results to remove any trend
or seasonality from the time series data if necessary and calculate CV or CV Squared
based on this transformed time series. Both trend and seasonality are known to distort the
segmentation results because they indicate volatility despite often being predictable.
Let’s say, for example, that the CV calculated for a planning object is 0.6 with an observed
trend left untouched, which means that the item would be assigned to segment Y. With the
trend removed, the CV calculated for it is 0.2, which means that the item would be
assigned to segment X. Since the second CV value is lower than the first one, the system
automatically chooses X as the segmentation result.
If the time series data is intermittent, it may happen that the CV value is higher after the
cleansing than before. In this case the planning object gets assigned to the segment that
was calculated based on the original segmentation measure values.
Note: The analysis results can only be considered if time series analysis has already been
executed for the input key figure of XYZ segmentation.
● Aggregate over Periods
If you choose this calculation strategy, the system performs the following steps:
1. It retrieves the segmentation measure values that were calculated by another tool such
as the Manage Forecast Error Calculations app.
2. It processes the segmentation measure values using the aggregation method you
select.
3. It compares the results of the calculations to the thresholds you specified and assigns
the planning objects to XYZ segments accordingly.
This calculation strategy is useful, for example, if you want to classify the planning objects
based on a forecast error measure such as MAPE.
The following aggregation methods are available:

- Minimum: The smallest value produced by an item is compared to the thresholds.

- Maximum: The largest value produced by an item is compared to the thresholds.
- Average: The average of all values produced by an item is calculated and compared to
the thresholds.
- Sum: The values produced by an item are summed up and the total value is compared
to the thresholds.
Note:
This calculation method is identical to segmentation method no. 5 in ABC
segmentation.
ABC and XYZ Segmentation Process
Figure 191: ABC and XYZ Analysis Segmentation Process
Animation: ABC and XYZ Analysis Segmentation Process

For more information on ABC and XYZ Analysis Segmentation Process, please
view the animation in the lesson Using ABC and XYZ Segmentation, online in the
SAP Learning Hub.
To define profiles containing one or two sets of rules that allow the system to classify the
planning objects belonging to the selected planning area and planning level, the Manage
ABC/XYZ Segmentation rules app is used.
One set of rules provides the grounds for an ABC analysis, which classifies the items
according to their contribution to the total value of the selected segmentation measure.
The other set of rules provides the grounds for an XYZ analysis, which classifies the items
according to their volatility in terms of demand or consumption.
If you define both sets of rules for the same segmentation profile, the same planning objects
are assigned to two different segments simultaneously.

ABC and XYZ Analysis Segmentation — Key Elements

You can configure, schedule, and run ABC/XYZ segmentation if the planning area you are
using contains some key elements as described in the following list:
● Attributes
Begin with creating or choosing the attributes that you will need for the segmentation
process (for example, ABC Code or XYZ Code Description).
● Target master data type
In the next step, create or choose a master data type with the target attribute that you that
want to use for storing the segmentation results. The key attributes of that master data
type should match the calculation level that you plan to use.
An attribute can be used for saving the segmentation results if the following apply:
- It is not a key attribute of the master data type.
- Its data type is NVARCHAR and its length has been specified.
- It belongs to a simple or compound master data type.
In addition to the target attribute, the target master data type can also contain an attribute
to lock segmentation code values and another to store the segmentation code
descriptions.
● Key figure used as the segmentation measure
When you have specified the target master data type, you can go on to set up the key
figure that you want to use as the segmentation measure. All key attributes of the target
master data type should be added to the base planning level of this key figure as root
attributes.
Note:
Time-independent key figures cannot be used as segmentation measures.
● Planning level
If you want to display the segmentation results in the IBP Excel add-in or filter items by
segments in various apps, you should add the ABC and XYZ code attributes to the planning
levels that contain all key attributes of the calculation level.
● Planning operators
The SEGMENTATION planning operator is automatically assigned to the planning area.
You can also add existing planning operators of the ABC type, but you cannot create new
operators for it.
To execute ABC & XYZ segmentation, you can use the predefined ABC/XYZ Segmentation job
template from the Application jobs app or you can use the Excel Add-in.
Segmentation results can be checked in the IBP add-in for Microsoft Excel. If you compare the
results with the available analytics and find that some values need to be adjusted, you can
make the required changes after opening the worksheet that shows the latest segmentation
results.

Segmentation allows to select a tailored forecasting methodology based on a clustered

demand behavior and on business relevance.
Segmentation not only drives a forecasting approach, but also drives the demand planner’s
review strategy, helping them focus on the required products efficiently. This results in a
higher level of forecast accuracy.
Figure 193: Staffing Done Right
LESSON SUMMARY

Unit 7
Lesson 2
Using Time Series Analysis
LESSON OBJECTIVES
Time Series Analysis

The automation of forecasting processes allows efficient planning cycles that require less
resource and often result in more accurate forecasts than conventional forecast calculations.
SAP Integrated Business Planning currently provides the tools for one way to achieve this
goal. You can run time series analysis on a set of planning objects, and then set the system to
automatically modify the values of the input key figure during XYZ segmentation based on the
properties that the analysis identified.
Figure 194: Time Series Analysis
Animation: Time Series Analysis

For more information on Time Series Analysis, please view the animation in the
lesson Using Time Series Analysis, online in the SAP Learning Hub.
If you are not sure about the nature of time series data in your planning area, you can set the
system to analyze the values of a selected input key figure based on predefined rules and save
the identified properties in the background. This process is called time series analysis.

Lesson: Using Time Series Analysis
Figure 196: Time Series Analysis in IBP
Time Series Analysis: Process

The process consists of the following steps:
1. You set up the rules for the analysis in the Manage Forecast Automation Profiles app.
2. You schedule and run the time series analysis in the Application Jobs app.
The properties of time series data can be useful inputs for several automatic and manual
forecasting processes. In the current version of SAP Integrated Business Planning, they can
be leveraged automatically by XYZ segmentation only.
If you save the properties in an attribute and other results in key figures, you can use those
attributes and key figures for limiting and filtering your planning views in the IBP Excel add-in.
You could modify the values of time series property attribute in the Excel add-in if you wish.
However, that is not recommended because the changes you make do not influence the
automated forecasting processes.
In addition to filtering planning views, you can also use the saved attributes to filter the set of
available planning objects in the Assign Forecast Models app. This app allows you to assign
the most suitable forecast model to each planning object.
Currently, this is the only section that you can use for setting the rules for times series
analysis. The analysis can assign the following properties to any planning object in the
selected planning area:
● Trend - A continuous time series in which the values consistently increase or decrease.
● Seasonality - A continuous time series in which the values increase or decrease repeatedly
with a certain frequency.
● Irregular - A continuous time series with high volatility, but no specific pattern.
● Intermittent - A time series that contains intervals of various lengths between the
subsequent sale dates.
● Lumpy - An intermittent time series in which relatively large deviations can be observed.
● Continuous - A time series with very few missing values and no other patterns.

You can use additional categories during the analysis. These categories define the level of
details by which the system assigns properties to the analyzed planning objects.
You can choose one or more of the following options by setting the respective buttons to on:
● Separate Categories per Type of Seasonality
The system not only assigns the seasonality property to planning objects, but also the type
of seasonality, which can be multiplicative or additive.
● Separate Categories per Length of Seasonal Cycle
The system also saves the length of the seasonal cycles in addition to the seasonality and,
if chosen, the additive or multiplicative properties.
● Separate Categories per Trend Direction
The system not only assigns the trend property to the planning object, but also the
direction of the trend, which can be upward or downward.
● Separate Category for Lumpy Demand
The system calculates a CV Squared value that shows the volatility of intermittent time
series data. If the CV Squared value is higher than the threshold you specify in the next
field, the lumpy property is assigned to the planning object.
The categories assigned to a planning object are combined to form property groups such as
intermittent with additive seasonality (6) or multiplicative seasonality with trend.
You can choose attributes and key figures for saving the results of the time series analysis at
various calculation levels. Choosing an output is not mandatory because the system saves all
properties in the background anyway.
Note:
If you do not select any attributes or key figures, you cannot check the results of
the time series analysis anywhere, not even in the application logs.
If you save the results in specific attributes and key figures, you can use them for limiting and
filtering your planning views in the IBP Excel add-in and for filtering the set of available
planning objects in the Assign Forecast Models app, which can help you assign the most
suitable forecast model to each planning object.
Figure 197: Time Series Analysis and Forecasting Algorithms

Unit 7
Exercise 16
Use Time Series Automation Analysis
Simulation: Use Time Series Automation Analysis

For more information on Use Time Series Automation Analysis, please view the
simulation in the lesson Using Time Series Analysis online in the SAP Learning
Hub.
You want to perform a time-series analysis of your products. The automation of forecasting
processes allows efficient planning cycles that require less resource and often result in more
accurate forecasts than conventional forecast calculations.
1. Create a Forecast automation profile using the data in the table provided.
Parameter Value
Planning area ZSAP6
Input for analysis Actuals qty
Unit of Measure to ID KG
Calculation Level Customer ID, Location ID, and Product

ID
Periodicity Monthly
Frequency of reanalysis 0 Months
Sensitivity for the Seasonality Test 0.2
Separate Categories per Type of Sea- On

sonality
Significance of Trend Test 0.05
Separate Categories per Trend Direction On

Probability for the White Noise Test 0.9
Intermittency Detection Method Average demand interval = 1.33
Separate Categories for Lumpy Demand On

Attribute for Time Series Properties Time Series Property (TIMESERIE‐
SPROPERTY)
2. Execute the newly created Forecast automation profile.
3. View the results in the Excel UI using your General Master Data favorite.

Unit 7
Solution 16
Use Time Series Automation Analysis
Simulation: Use Time Series Automation Analysis

For more information on Use Time Series Automation Analysis, please view the
simulation in the lesson Using Time Series Analysis online in the SAP Learning
Hub.
You want to perform a time-series analysis of your products. The automation of forecasting
processes allows efficient planning cycles that require less resource and often result in more
accurate forecasts than conventional forecast calculations.
1. Create a Forecast automation profile using the data in the table provided.
Parameter Value
Planning area ZSAP6
Input for analysis Actuals qty
Unit of Measure to ID KG
Calculation Level Customer ID, Location ID, and Product

ID
Periodicity Monthly
Frequency of reanalysis 0 Months
Sensitivity for the Seasonality Test 0.2
Separate Categories per Type of Sea- On

sonality
Significance of Trend Test 0.05
Separate Categories per Trend Direction On

Probability for the White Noise Test 0.9
Intermittency Detection Method Average demand interval = 1.33
Separate Categories for Lumpy Demand On

Attribute for Time Series Properties Time Series Property (TIMESERIE‐
SPROPERTY)
a) In the SAP Fiori launchpad, in the Demand Planner group, choose the Manage Forecast
Automation Profiles tile.
b) Choose Create and in the displayed screen, add the data from the table provided.

Lesson: Using Time Series Analysis
c) Choose Save and record the number ID assigned to your profile, next to the Planning
Area ZSAP6.
d) Choose Home to return to the SAP Fiori launchpad.
2. Execute the newly created Forecast automation profile.

a) In the General Planner group, choose the Application jobs tile and choose Create.
b) Choose the Forecast automation job template, select Start immediately, choose the
ZSAP6 planning area, and choose the forecast automation profile with the number ID
you recorded in the previous step.
c) Choose Schedule.
3. View the results in the Excel UI using your General Master Data favorite.
a) In the Excel UI, in the Master Data section, choose Favorites → General Master Data.
c) Add a new tab and choose Customer Source.
d) Choose OK to view the report.
e) On the Customer Source tab, filter for your products ending in your ## number.
f) Scroll to locate the Time Series Property attribute column and view the type of demand
entered by the forecast analysis run.
g) When you finish your analysis, close the view without saving.

LESSON SUMMARY

Unit 7
Lesson 3
Setting up Alerts for Forecast Accuracy
LESSON OBJECTIVES
Alerts for Forecast Accuracy

Custom alerts are used to find important or critical supply chain issues such as inventory
shortages, an imbalance of supply and demand, any unexpected changes in the supply chain
or very low forecast accuracy.
You can specify the threshold values to be used to determine issues. For example, you can
specify the threshold values for minimum stock levels in a particular location.
Based on these threshold values, the system analyzes the data on the fly and finds where the
threshold values are reached. This enables you and your colleagues to react quickly, before a
supply chain situation becomes a problem.
Figure 199: Alerts for Forecast Accuracy
For analysis, it is not only analytics and dashboards that can be used, but also custom alerts
created by users or IT administrators. It is better to create custom alerts for forecast
accuracy after ABC/XYZ segmentation because that provides an opportunity to check alerts
per segment.
Custom alerts are generated by the system and visible to assigned users regarding important
or critical supply chain situations. Information contained in the custom alert allows users to
analyze and measure the impact of unexpected situations on their business. Users can fine-
tune the criteria for alerts to be generated to mitigate issues in the supply chain. Custom

alerts are integrated with cases in the SAP Supply Chain Control Tower, which facilitates the
tracking and resolution of supply chain problems.
Note:
Custom alerts are not synonymous with key figure alerts defined in the Microsoft
Excel add-in, and are not merged together. User-defined scenarios are not
supported in custom alerts.
Figure 200: Alerts for Forecast Accuracy Monitoring
It is necessary to define the planning area, calculation levels, and time horizon you would like
to use as your data set to trigger alerts.
You can do the following:
● Add rules and conditions under which alerts are raised.
● Specify the minimum number of consecutive periods that a condition must exist before an
alert is generated.
● Include the metrics that you want to be displayed to help you analyze the alert and take
action.
● Choose for which version of the data you would like to trigger alerts.
● Make a setting for alerts that may occur across an established time horizon to be
aggregated into a single chart display in the monitor.
● Select various options for displaying the alert data (using different chart types).
● Subscribe to custom alert definitions and add filters if needed to restrict or further
customize the alerts that are triggered.
Note:
Only alert definitions that have been subscribed to, generate alerts in the
Monitor Custom Alerts app.

Lesson: Setting up Alerts for Forecast Accuracy
● Assign an Excel template so that users can solve alerts in Excel.

● Share definitions and subscriptions with other users or user groups.
● Opt out of definitions and subscriptions that are shared by others if you are no longer
involved in resolving them.
● Navigate directly from the definition to the monitor.
It is necessary to define rules for any alerts to be generated. Rules are based on a
combination of key figures upon which the application calculates on-the-fly the alert
situations.
Conditions
You can set the condition that all rule groups (you must have at least one rule group) must
satisfy (default setting) or, if you have more than one rule group, any or all groups must
satisfy for an alert to be triggered.
Within the rule group, you have individual rules (you must have at least one rule). You can set
the condition that all the rules must be satisfied (default setting) or, if you have more than one
rule, any or all of the rules must be satisfied for an alert to be triggered.
Rule Types
You can define rules in either of the following ways:
● Absolute: One key figure that is compared to a threshold value.
● Percentage (%): Two key figures, where both are compared using a percentage value.
Operators
You can use the following operators:
● = (is equal to)
● < (is less than)
● > (is greater than)
● <= (is less than or equal to)
● >= (is greater than or equal to)
● <> (is not equal to)
● is null
Null is used only to compare one key figure. For example, you create a rule as follows:
Confirmed quantity is null. The system returns records for which it finds for the confirmed
quantity no values in the database. This is to differentiate between null and zero values.
Machine Learning Rules
You can apply two clustering-based algorithms, k-means and Density Based Spatial
Clustering of Applications with Noise (DBSCAN). The number of alerts can be either reduced
or increased to have meaningful insights. Additionally, if you change data, the alert definition
is automatically adjusted.
Using the standard method, it may be cumbersome to create your alert definition rules to
ensure that the correct outliers are identified. Very often, this leads to creating several alert
definitions to determine the one outlier. With machine learning, this problem is resolved as
the algorithm carries out optimal clustering to determine the outlier.

Custom alerts are based on static rules. This works fine if the threshold for the exception
condition is known and the data is generally consistent. If the data is variable and changes to
the pattern occur, the static rules may lead to too many or too few alerts, which either keeps
planners busy or leaves them clueless. With machine learning, planners can set up alerts
without needing to know the exact thresholds.
For example, if you define alerts for your product’s sales quantity based on an ABC indicator,
the rules would be different for A product (fast seller), which could be set at 5% decline in
sales, than and for the C product (slow seller), which could be set for 20% decline in sales.
This would result in several different alerts to provide the same result, which is to indicate that
there has been a drop in your sales quantity.
With machine learning, the grouping of your ABC products can be done automatically.
Similarly, it allows you to find the outliers in the groupings.
The k-means and DBSCAN clustering methods are used to find and group points on a chart
that are close together. They also help in identifying the outliers (isolated points in low-density
regions outside the groupings).
Note:
The minimum number of records for the algorithm to work is 25. If the number of
records is less than 25, all records are considered outliers.
k-means
This cluster analysis method is popularly used in machine learning. It is simpler to understand
and execute, but less accurate for finding the outliers.
The k-means algorithm requires a minimum number of clusters to be provided and the
clusters are expected to be of similar size. However, the number of clusters in SAP Integrated
Business Planning is determined automatically.
Note:
The k-means cluster analysis method only uses parameter values and ignores
attributes. It uses only one key figure for its calculations.
DBSCAN
The DBSCAN algorithm checks attribute groupings and performs clustering on these
attributes. In addition to performing outlier determination on one key figure, it uses multiple
attributes during the calculation process that makes it more accurate than the k-means
algorithm.
You can use the Define and Subscribe to Custom Alerts app to create subscriptions to custom
alert definitions that allow you to view any alerts triggered in the Monitor Custom Alerts app.
The custom alerts in the alert monitor are based on all the custom alert subscriptions you
have created or the ones that have been shared with you.
You can perform the following tasks:
● Define which metrics are displayed in the Monitor Custom Alerts app for the alert.
● Specify the number of periods before and after the alert occurrence that you want to have
displayed in the Monitor Custom Alerts app.

Lesson: Setting up Alerts for Forecast Accuracy
● View the number of alerts that this subscription generates.

● Add filters to refine the alert data or remove filters as needed.
● Delete or deactivate your own subscriptions so that you are no longer subscribed to a
custom alert definition, which can be helpful if your job responsibilities have changed or
there is an issue with the data.
● Opt out of the subscription.
● Share the subscription with users and user groups.
You can perform the following tasks in Monitor Custom Alerts app:
● Analyze the charts and metrics to identify and resolve potential issues.
● Link a new case or an existing case to an alert to follow up on the issues, delegate them,
and resolve them.
● Evaluate and assess the risks you may encounter if you do not take immediate action.
● Filter custom alerts by case.
LESSON SUMMARY


Unit 7
Lesson 4
Performing Analysis in the SAP Fiori Web UI
and the Excel UI
LESSON OBJECTIVES
Analysis in the SAP Fiori Web and Excel UIs

To analyze created statistical forecast, statistical forecast adjustments, forecast error,
forecast accuracy, or final demand plan, you can use the IBP SAP Fiori Web UI or the IBP
Excel add-in UI.
Figure 201: Forecast Analysis in the IBP SAP Fiori Web UI
Animation: Forecast Analysis in the IBP SAP Fiori Web UI

For more information on Forecast Analysis in the IBP SAP Fiori Web UI, please
view the animation in the lesson Performing Analysis in the SAP Fiori Web UI and
the Excel UI, online in the SAP Learning Hub.
The SAP Fiori launchpad is the access point for all web-based applications (apps) for SAP
Integrated Business Planning (IBP). Apps are displayed as tiles, and you can launch each app
by clicking the corresponding tile on the launchpad.
The tiles displayed on your launchpad home page are arranged into groups, with the group
title displayed at the top of each group.

For demand planners, there are some special apps like Manage forecast models, Assign
forecast models, and so on, grouped into a Demand planner group that is available to every
demand planner if they have the correct authorization.
There are some general apps like Analytics, Dashboards and Custom alerts overview that can
be used for analysis of data in the SAP Fiori Web UI.
Figure 203: Forecast Analysis in the IBP Excel Add-in UI
Animation: Forecast Analysis in the IBP Excel Add-in UI

For more information on Forecast Analysis in the IBP Excel Add-in UI, please view
the animation in the lesson Performing Analysis in the SAP Fiori Web UI and the
Excel UI, online in the SAP Learning Hub.
The SAP Integrated Business Planning add-in for Microsoft Excel allows you to review and
modify your planning data and run simulations. Depending on the SAP Integrated Business
Planning applications that your company has licensed and configured, it also provides
advanced planning functions, such as inventory optimization, and statistical forecasting
methods for creating accurate forecast data from historical sales figures.
Features
The following list shows what you can do with the IBP Excel add-in:
● Define planning views to suit different business needs.
A planning view is a user-defined data report in Excel that allows you to view, edit, and
share planning data stored in the database. For example, if you perform capacity planning,
you can define a planning view that allows you to compare the capacity load, required
capacity, and available capacity in particular locations on a monthly or quarterly basis.
From a technical point of view, a planning view is a user-defined data report that allows you
to view, edit, and share information directly from the application database and save it back
to the database. All generated planning views can be stored locally as Excel data files or
shared with other users in the system.
You can use planning views to show and edit key figure data and master data in a time
series, and perform simulations on the data. In other words, planning views provide the

Lesson: Performing Analysis in the SAP Fiori Web UI and the Excel UI
means by which you can perform your daily planning activities as a planner in SAP
Integrated Business Planning.
You can use the following functions while working with planning views:
- Filter the data and save the filters.
- Save planning views as favorites.
- Add new planning objects.
- Copy settings from one planning view to another.
- Drill down in the data to see more detail.
- Use the quick edit.
- Simulate the effect of changes in your planning view.
- Create scenarios.
- Define additional versions of your planning view.
- Work offline.
● Use your planning view to update planning data and simulate scenarios.
In your planning views, you can do the following, for example, edit planning data according
to your requirements and save the changes to the database, simulate different planning
scenarios and save the changes to the database, or save the simulation as a scenario that
can be shared with other users, compare different versions in one planning view, for
example, upside and downside, record changes to key figures in the change history.
A simulation recalculates the planning view to simulate a scenario with the changes
applied. You can create what-if simulations to see how certain changes in the planning
data affect your overall plan. You can then save the changes or refresh the view to discard
the changes. You can also save the changes as a scenario.
You can display a list of your scenarios or change the settings for scenarios by choosing
Manage in the Scenarios group. For each scenario, you can change the header data, and
you can define whether the scenario is to be reset (the data is erased but the scenario is
kept), promoted (the data is saved permanently to the database and the scenario is reset),
deleted, or duplicated.
● Manage master data.
You can make adhoc changes to master data.
● Perform advanced planning and forecasting.
If your company has implemented the relevant applications and you have the required
permissions, you can perform advanced planning and forecasting from the IBP Excel add-
in, either in real time or as a scheduled job. SAP Integrated Business Planning includes sets
of algorithms for supply planning, inventory optimization, and statistical forecasting. You
can also create snapshots of key figure values at a specific time in the past.
LESSON SUMMARY


Unit 7
Lesson 5
Tailoring Your Forecasts
LESSON OBJECTIVES
Tailor-made Configuration
After product lifecycle implementation, promotion planning, segmentation and calculating
forecast error, forecast algorithms can be adjusted accordingly to improve your demand
planning processes. As some possible tailor-made changes, below points can be taken into
consideration:
● Tailor your forecast strategy and inventory optimization to the characteristics of
segments.
● Assign more-appropriate forecast models to planning objects.
● Change thresholds to detect outliers more accurately.
● Analyze forecast accuracy by product segments.
● Add additional segments to your products like A, B1, B2, C in case of a necessity to check
and forecast them separately.
● Add FMR analysis manually to custom attributes to check your delivery history per
ABC/XYZ/FMR segments.
● Identify planning objects with a relatively high or relatively low level of forecastability and
work on it.
● Identify inventory items that require closer attention.
● Define alerts for specific segments only and check only the most important segments in
the case of a lack of time during demand planning cycle.
● Improve your forecast using product lifecycle and promotion planning.
LESSON SUMMARY


Unit 7
Learning Assessment
1. What are some of the purposes for which properties of time series data can be used?
X A They are leveraged by XYZ segmentation process
X B They can be used for limiting and filtering planning views
X C They are leveraged by ABC segmentation process
X D They can be used for filtering a set of available planning objects in the Assign
Forecast Models app


UNIT 8 Demand Sensing
Lesson 1
Introducing Demand Sensing 247
Lesson 2
Describing the Model Component Demand Sensing 249
Lesson 3
Managing Demand Sensing 259
Exercise 17: Use Demand Sensing 271
Exercise 18: Review Demand Sensing Results 277
Exercise 19: Run a Demand Sensing Update 279
Lesson 4
Tailoring the Demand Sensing Algorithm 285
Lesson 5
Approving the Demand Sensing Result 286
Exercise 20: Approve the Demand Sensing Result 289
UNIT OBJECTIVES
● Explain demand sensing

● Explain model component
● Manage demand sensing
● Tailor the demand sensing algorithm using configuration
● Approve the demand sensing result

Unit 8: Demand Sensing

Unit 8
Lesson 1
Introducing Demand Sensing
LESSON OBJECTIVES
Explain Demand Sensing

In this process, optimized daily forecasts are created for multiple products in the background
in a highly automated way for a short period between 4-8 weeks. The forecasts are based on a
review of the consensus demand and the most recent demand signals retrieved from internal
sources such as sales orders and external sources such as social media or competitors.
Information regarding promotion and new product introduction can also be taken into
account.
The process results in adjusted short-term forecasts that can be used as optimized input by
processes such as operational supply planning or transportation planning.
Figure 205: Demand Sensing in a Nutshell
LESSON SUMMARY


Unit 8
Lesson 2
Describing the Model Component Demand
Sensing
LESSON OBJECTIVES
Model Component Demand Sensing

Setting Up a Planning Area for Demand Sensing
Before you can use demand sensing, a dedicated planning area must be set up in SAP
Integrated Business Planning. Create a planning area in the Configuration app as a basis for
your demand sensing and demand planning processes.
You may copy one of the sample planning areas delivered by SAP, such as the SAP6 sample
planning area for demand, and adjust it as needed.
You can either have a separate planning area for demand sensing or you can share a planning
area with other applications of SAP Integrated Business Planning. In both cases, the planning
area must contain the following items:
Master Data Types
Demand sensing only runs at the Product ID –Location ID –Customer ID calculation level. The
following master data types are mandatory for demand sensing:
● IBPPRODUCT
● IBPLOCATION
● IBPCUSTOMER
● IBPLAG
● IBPUOMTO
● IBPUOMCONVERSIONFACTOR
● IBPSALESORDER
● IBPDELIVERY
The following master data types are optional:

● IBPPROMOTION
● IBPDSSETTINGS
Time profile level:

● Days and Weeks
The demand sensing process is currently restricted to days and weeks. The key figure defined
for the consensus demand plan must be available in weekly buckets. If the data is available in
months, it must be disaggregated into weeks.
● Planning levels:
Product / location / customer / weeks and a key figure for the consensus demand plan
(transferred from SAP IBP Demand Planning)
Product / location / customer / days and a key figure for the result of demand sensing
(transferred to SAP IBP Supply Planning)
● Key Figures:
You need to create key figures to store the following types of data:
● - The Forecast signal e.g. CONSENSUSDEMAND (Consensus demand plan)
- The Sales signal in the past e.g. ADJDELIVQTY (Delivered Qty Adj)
- The Open Order signal e.g. FUTUREORDEREDQTY (Open Sales Order)
- Optional data such as promotion plans and downstream signals
Figure 206: Consensus Demand as One of the Key Inputs for Demand Sensing
Output data that comprises the following:

● Sensed demand quantity
● Adjusted sensed demand
● Final sensed demand

Lesson: Describing the Model Component Demand Sensing
Figure 207: Main Output Key Figures for Demand Sensing
Additional Key Figures when Using Demand Sensing

Below table shows mandatory naming convention for key figure IDs:
Example Key Figure Definition Business Meaning

FORECASTBIAS Bias Adjustment Detail Key Short-term forecast bias
Figure
FUTUREORDERQTYPROFILE Open Order Adjustment Forecast Adjustment Factor
0 to Detail Key Figures for Open Order
FUTUREORDERQTYPROFILE Daily Disaggregation Profile Open Order Profile Day 1 to
6 Detail Key Figures Day 7
Note:
Daily disaggregation is done using the profiles PROFILE0 to PROFILE6. Seven
numbers in total represent the different days of the week.
Intermediate Key Figures that Help You Understand How the Sensed Demand was
Calculated
Some of these key figures are optional and not delivered with the sample planning areas. To
see how you can configure them, choose the titles of the table below.
Table 3: Optional Weekly Intermediate Key Figures

Example Key Fig- Definition Planning Level Business Meaning
ure
WEEKLYOPEN- Current open or- Product/Location/ Intermediate Results - Weekly
ORDER ders where the or- Customer/ Week Open Order
der creation date is
before the base pe-
riod


ure
WEEKLYOPTIMI- Optimized sensed Intermediate Results - Weekly
ZEDSD demand results Optimized Sensed Demand
from the machine
learning algorithm
before any post-
processing
WEEKLYCAP- Capped sensed de- Intermediate Results - Weekly

PEDSD mand according to Capped Sensed Demand
maximum increase
and decrease set-
tings in the forecast
model which are
applied to opti-
mized sensed de-
mand
WEEKLYUPLIFT- Sensed demand re- Intermediate Results - Weekly

BALANCEDSD sults after planned Uplift Balanced Sensed De-
promotion uplifts mand
are balanced and
added back to cap-
ped sensed de-
mand
WEEKLYBASED- Sensed demand re- Intermediate Results - Weekly

BALANCEDSD sults after base bal- Base Balanced Sensed De-
ancing and open mand
order matching
steps are executed
on the uplift bal-
anced sensed de-
mand
WEEKLYCALBA- Sensed demand re- Intermediate Results - Weekly

LANCEDSD sults after sensed Holiday Balanced Sensed De-
demand values mand
have been moved
from all holiday pe-
riods to the preced-
ing workdays

Table 4: Optional Bias Adjustment Key Figures

ure
FCTBIAS- Bias horizon coeffi- LOCPRODCUS- Forecast Bias Horizon 1
WEIGHT0 cient 0: machine TLAGCALWEEKLY Weight
learning weight.
Optional – will only
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.
FCTBIAS- Bias horizon coeffi- Forecast Bias Horizon 2

WEIGHT1 cient 1: machine Weight
learning weight.
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.

learning weight.
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.

learning weight.
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.


ure
learning weight.
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.

learning weight.
be populated if a
key figure with the
right business
meaning and com-
patible planning
level exists in the
planning area.
FCTBIAS- Start of quarter Start of Quarter Bias Weight

WEIGHT6 bias weight for ma-
chine learning. Op-
tional – will only be
populated if a key
figure with the right
business meaning
and compatible
planning level ex-
ists in the planning
area and the time
profile includes
WEEKOFQUARTER
and MONTHOF-
QUARTER data.


ure
FCTBIAS- Middle of quarter Middle of Quarter Bias Weight
WEIGHT7 bias weight for ma-
chine learning. Op-
tional – will only be
populated if a key
figure with the right
business meaning
and compatible
planning level ex-
ists in the planning
area and the time
profile includes
WEEKOFQUARTER
and MONTHOF-
QUARTER data.
FCTBIAS- End of quarter bias End of Quarter Bias Weight

WEIGHT8 weight for machine
learning. Optional –
will only be popu-
lated if a key figure
with the right busi-
ness meaning and
compatible plan-
ning level exists in
the planning area
and the time profile
includes WEEKOF-
QUARTER and
MONTHOFQUAR-
TER data.
Table 5: Optional Forecast Error Improvement Key Figures

Example Key Figure Definition Base Planning Level
TOTALMAPEIMPROV Total forecast error im- LOCPRODCUSTWEEKLY
provement projected due
to all demand sensing
short-term forecast ad-
justments. Optional – will
only be populated if a key
figure with this exact
name is added to a plan-
ning area at the right
planning level.

Note:
● Helper key figures that are needed to support currency or unit of measure
conversion
● A key figure to store the information that a historical period should be
disregarded during the learning phase of the demand sensing process
Demand Sensing can be run only on base version.
Figure 208: Demand Sensing Key Figures
Definition and Usage of Snapshots
Figure 209: Introduction What is a Snapshot (1)
Animation: Introduction What is a Snapshot (1)

For more information on Introduction What is a Snapshot (1), please view the
animation in the lesson Describing the Model Component Demand Sensing,

A snapshot is the current picture of any time key figure for any time range.

Lags in Demand Sensing represent the number of weeks into the future that you want to
forecast. The current week would be the revision date.

Given a certain forecast interval, the so-called Lag N forecast is a forecast calculated in a
certain period x for period (x+N).

A new snapshot key figure is automatically generated when a snapshot configuration is saved.
Using Lag-Based Snapshots for Demand Sensing
A snapshot is a static copy of the values for a key figure within a specific time range. Lag-
based snapshots are taken with predefined lags and saved in a key figure that has Lag as a
root attribute in its base planning level. Demand Sensing needs lag-based snapshots of the
consensus demand to analyze how the forecast calculated in the past as various lags
compares and correlates to actual sales at each lag. This helps in optimizing the forecast for
the future.
LESSON SUMMARY

Unit 8
Lesson 3
Managing Demand Sensing
LESSON OBJECTIVES
Manage Demand Sensing Models

Demand Sensing Algorithms
The demand sensing (full) or demand sensing (update) algorithm is required to run demand
sensing in the IBP add-in for Microsoft Excel.
Prerequisites:
● You can add a demand sensing algorithm to your forecast model if the following apply:
- In the Configuration app, a planning level has been defined for the planning area that
contains only the following master data types:
■ Product (where the root attribute is PRDID)
■ Location (where the root attribute is LOCID)
■ Customer (where the root attribute is CUSTID)
■ Time
● On the main screen of the Manage Forecast Models app, you have selected a planning area
where the time profile contains weeks, but not months.
Restrictions:
The following restrictions apply to forecast models that contains a demand sensing algorithm:
● They cannot contain any pre-processing step except for promotion sales lift elimination.
● They can contain only one forecasting step.
● They cannot calculate error measures.
● They do not calculate ex-post forecasts.
● They can be created only at the lowest level of time granularity (days).
● They can take input demand signals only from the two lowest levels of time granularity
(days, weeks).
● They can be used for background forecast calculations in the IBP add-in for Microsoft
Excel only if the Customer, Location, and Product planning levels are selected there in the
planning view.

● They can only run on the baseline version of the selected planning area.
Figure 216: Demand Sensing Introduction
Animation: Demand Sensing Introduction

For more information on Demand Sensing Introduction, please view the
animation in the lesson Managing Demand Sensing, online in the SAP Learning
Hub.
Two types of Demand Sensing algorithms exist: Demand Sensing (Full) and Demand Sensing
(Update). It makes sense to run the full algorithm on a weekly base and the update daily.
Figure 218: Demand Sensing Full Run vs Update Run
The full run takes into account everything, whereas the update run is an efficient delta routine.

Lesson: Managing Demand Sensing
Figure 219: Create a New Forecast Model for Demand Sensing Time Settings
For the Demand Sensing algorithm the periodicity needs to be set to “Daily”.
Figure 220: Create a New Forecast Model for Demand Sensing Time Settings - Calculation Example
Minimum entry value for the historical periods setting is automatically calculated.

Figure 221: Create a New Forecast Model for Demand Sensing (Full) Forecasting Steps (1)
Creating a new forecast model for demand sensing (full), first the algorithm is assigned to the
model.
Having assigned the algorithm, consider the naming conventions for certain key figures used
as a input.

Figure 223: Create a New Forecast Model for Demand Sensing (Full) Forecasting Steps (3) - Key Figures
The SAP6 planning model provides defaults for the required key figure entries.
Figure 224: Requested and Confirmed Quantities
Animation: Requested and Confirmed Quantities

For more information on Requested and Confirmed Quantities, please view the
Hub.
Having the choice between requested and confirmed quantities, it is recommended by best
practices to use the requested quantities.

Figure 226: Scenario for the Usage of Confirmed Quantity as Input for the Future Open Order Quantity
Animation: Scenario for the Usage of Confirmed Quantity as Input for the Future
Open Order Quantity
For more information on Scenario for the Usage of Confirmed Quantity as Input
for the Future Open Order Quantity, please view the animation in the lesson
Managing Demand Sensing, online in the SAP Learning Hub.
There is one exceptional case in which you would think about using confirmed quantities
instead of requested: when interacting and integrating directly with ATP (available-to-
promise).
Figure 228: Future Ordered Qty - Definition and Usage in Demand Sensing
Animation: Future Ordered Qty - Definition and Usage in Demand Sensing

For more information on Future Ordered Qty - Definition and Usage in Demand
Sensing, please view the animation in the lesson Managing Demand Sensing,

The Lag N future open orders is the total of orders of week N in the future, created before the
current period. Going back to a historical period, the total order for this historical period lag 0
(that have been created before this historical period) are denoted as Historical Lag 0 open
orders.
Figure 230: Missing Values
Note the prerequisites for missing value substitution as given in the figure.
Figure 231: Running Demand Sensing with New Products Plan Object Mapping
Animation: Running Demand Sensing with New Products Plan Object Mapping
For more information on Running Demand Sensing with New Products Plan
Object Mapping, please view the animation in the lesson Managing Demand
Sensing, online in the SAP Learning Hub.
In case of a new product, you can either provide a mapping from a known product containing
sales history or you can wait for at least 15 weeks before you run Demand Sensing.

Interpret and maintain any further entries for parameter settings as indicated.
Figure 234: Bias in Demand Sensing
Demand Sensing forecasts future bias based on an optimization of historical bias factors for
every lag and bias horizon.

Figure 235: Threshold Settings (1) Use Cases
Animation: Threshold Settings (1) Use Cases

For more information on Threshold Settings (1) Use Cases, please view the
Hub.
In terms of thresholds the maximum forecast increase/decrease settings are used to cap the
demand in case of data exceptions.
Figure 237: Threshold Settings (2) Maximum Forecast Increase/Decrease - Example
In this example the key figure values are capped if the calculated final sensed demand
numbers are higher than 150 pieces.

Figure 238: Threshold Settings (3) Maximum Forecast Increase / Decrease - Example
Animation: Threshold Settings (3) Maximum Forecast Increase / Decrease -

Example
For more information on Threshold Settings (3) Maximum Forecast Increase /
Decrease - Example, please view the animation in the lesson Managing Demand
Sensing, online in the SAP Learning Hub.
There is a default logic in case you choose to not enter any values for the forecast increase/
decrease.
Figure 240: Daily Average Calculation Horizon
Animation: Daily Average Calculation Horizon

For more information on Daily Average Calculation Horizon, please view the
Hub.
The daily average calculation horizon is a rolling window over which Demand Sensing
averages daily shipments.

Figure 242: Demand Sensing - Full vs. Update Run
Depending on the situation as given on the slide you would either choose a full Demand
Sensing run or just an update.
Figure 243: Background Information
You might have heard of the SmartOps company, developing the Demand Sensing algorithm.
It is meanwhile part of SAP SE.
Figure 244: Data Needed to Run Demand Sensing
It is highly recommended that you consider the data needed as prerequisites to successfully
run Demand Sensing.

Figure 245: Demand Sensing Algorithms
Animation: Demand Sensing Algorithms

For more information on Demand Sensing Algorithms, please view the animation
in the lesson Managing Demand Sensing, online in the SAP Learning Hub.
As mentioned before, there are two different Demand Sensing algorithms. In addition, there is
a pre-processing algorithm to eliminate promotion uplifts.
Figure 247: Demand Sensing Algorithms Full and Update Runs
Based on the given scenarios it is easier to understand why it makes sense to have a
combination of regular update and full Demand Sensing runs.

Unit 8
Exercise 17
Use Demand Sensing
Simulation: Use Demand Sensing

For more information on Use Demand Sensing, please view the simulation in the
lesson Managing Demand Sensing online in the SAP Learning Hub.
Task 1: Task 1: Create a Demand Sensing Profile

IBP for Demand is about creating a short term demand forecast, using demand streams.
1. Create a new forecast model consisting only of a Forecasting-step. Use the data in the
following table.
Fields Value
Planning Area ZSAP6
Model name DemandSensingFullRun##
Periodicity Days
Historical periods 180
Forecast periods 42
2. Add the statistical algorithm, Demand Sensing (Full), and configure the settings. Save the
model. Discuss what the settings does.
Fields Value
Main Input for Forecasting Steps Confirmed Qty
Target Key Figure for Forecast Con- Sensed Demand Qty

sensus Forecast
Delivered Qty Delivered Qty Adjusted
Minimum Data Points 8
Task 2: Task 2: Execute Demand Sensing in the Excel UI

The Excel UI is used to execute the Demand Sensing run. In this exercise, we execute the
Demand Sensing run and observe the results.
1. In the Excel UI, use your Demand Planning favorite to create a Demand Sensing
favorite using the data in the following table.

Selection Value
Time setting Days
Planning level Product ID, Customer ID, and Location ID
Key figures Sensed Demand Qty

Sensed Demand QtyAdjusted
Sensed Demand Qty Final
2. Run your DemandSensingFullRun## and analyze the results.
Field Value
Time Period Daily
Planning Level Product ID, Customer ID, and Location ID

Forecast model to be used DemandSensingFullRun##
UoM to ID KG
Filter HT_0##
You will see that forecast q-ty is present on the workdays and not present on weekdays. That
pattern is coming from the demand sensing profile. By default workdays are Monday thru
Friday.

Unit 8
Solution 17
Use Demand Sensing
Simulation: Use Demand Sensing

For more information on Use Demand Sensing, please view the simulation in the
lesson Managing Demand Sensing online in the SAP Learning Hub.
Task 1: Task 1: Create a Demand Sensing Profile

IBP for Demand is about creating a short term demand forecast, using demand streams.
1. Create a new forecast model consisting only of a Forecasting-step. Use the data in the
following table.
Fields Value
Planning Area ZSAP6
Model name DemandSensingFullRun##
Periodicity Days
Historical periods 180
Forecast periods 42
instructor.
b) In the Demand Planner group, choose the Manage Forecast Model tile.
c) Choose Create, and choose planning area ZSAP6.
d) In the General tab, enter DemandSensingFullRun## as both the model name and
description.
e) Choose Daily as the Periodicity.
f) In the Historical periods field, enter 180.
g) In the Forecast periods field, enter 42.
2. Add the statistical algorithm, Demand Sensing (Full), and configure the settings. Save the
model. Discuss what the settings does.
Fields Value
Main Input for Forecasting Steps Confirmed Qty

Fields Value
Target Key Figure for Forecast Con- Sensed Demand Qty

sensus Forecast
Delivered Qty Delivered Qty Adjusted
Minimum Data Points 8
a) Navigate to the Forecasting Steps tab.
b) Choose Confirmed Qty as the input key figure.
c) Choose Sensed Demand Qty as the target key figure.
d) Choose the algorithm Demand Sensing Full.
e) In the Consensus Forecast field, choose Consensus Demand without Promotions.
f) In the Delivered Quantity field, choose Delivered Qty Adjusted.
g) In the Minimum Data Points field, choose 8.
h) Choose Save.
Task 2: Task 2: Execute Demand Sensing in the Excel UI

The Excel UI is used to execute the Demand Sensing run. In this exercise, we execute the
Demand Sensing run and observe the results.
1. In the Excel UI, use your Demand Planning favorite to create a Demand Sensing
favorite using the data in the following table.
Selection Value
Time setting Days
Planning level Product ID, Customer ID, and Location ID
Key figures Sensed Demand Qty

Sensed Demand QtyAdjusted
a) Log in to the Excel UI, if you are already logged in, you need to log out and back in
again.
b) In the Planning View section, choose Favorites → Demand Planning.
c) In the Planning View section, choose Edit View → Edit Planning View.
d) On the Time Settings tab, choose Daily.
e) Choose the Planning Levels Product ID, Customer ID, and Location ID.
f) Select key figures Sensed Demand Qty, Sensed Demand Qty Adjusted, and
Sensed Demand Qty Final.
g) Choose OK.

h) Add this view as favorite Demand Sensing.
2. Run your DemandSensingFullRun## and analyze the results.
Field Value
Time Period Daily
Planning Level Product ID, Customer ID, and Location ID

Forecast model to be used DemandSensingFullRun##
UoM to ID KG
Filter HT_0##
a) Choose Run located in the Application Jobs subsection and choose Statistical
Forecasting.
b) Choose the Time Period Daily.
c) Choose the Planning Level Product ID, Customer ID, and Location ID.
d) Choose the model DemandSensingFullRun##.
e) Filter on HT_0##.
f) Choose Next.
g) Choose Run.
h) Choose Status in the Application Jobs subsection.
i) Follow the status of the execution of the forecasting job in the log, waiting until it
completes.
j) Choose Refresh in the Data Input subsection and view the forecast in the Excel UI.
k) Notice the new Sensed Demand Qty value.
You will see that forecast q-ty is present on the workdays and not present on weekdays. That
pattern is coming from the demand sensing profile. By default workdays are Monday thru
Friday.


Unit 8
Exercise 18
Review Demand Sensing Results
Simulation: Review Demand Sensing Results

For more information on Review Demand Sensing Results, please view the
simulation in the lesson Managing Demand Sensing online in the SAP Learning
Hub.
The demand planner wants to review the results of demand sensing and make some
adjustments.
1. Log in to the Excel UI and open your favorite Demand Sensing planning view.
2. Observe the results of the demand sensing run and make adjustments for Product ID
HT_0##, Customer ID EME200, and Location HD_DC_FR by entering 0 in the Demand
Sensing Adjusted key figure for each cell to the end of next week.

Unit 8
Solution 18
Review Demand Sensing Results
Simulation: Review Demand Sensing Results

For more information on Review Demand Sensing Results, please view the
Hub.
The demand planner wants to review the results of demand sensing and make some
adjustments.
1. Log in to the Excel UI and open your favorite Demand Sensing planning view.
a) Log in to the Excel UI with the login credentials provided by your instructor.
b) Choose the Demand Sensing favorite that you have created.
2. Observe the results of the demand sensing run and make adjustments for Product ID
HT_0##, Customer ID EME200, and Location HD_DC_FR by entering 0 in the Demand
Sensing Adjusted key figure for each cell to the end of next week.
a) The result of the demand sensing process is shown in key figure Sensed Demand Qty.
b) Locate the Sensed Demand Qty Adjusted key figure for Product ID HT_0##, Customer
ID EME200, and Location HD_DC_FR and enter 0 for each day in the next full week's
cells.
c) Choose Simulate and observe the changes in Sensed Demand Qty Final.
d) Choose Save Data.
e) Close the planning view.

Unit 8
Exercise 19
Run a Demand Sensing Update
Simulation: Run a Demand Sensing Update

For more information on Run a Demand Sensing Update, please view the
Hub.
In the case of changes in the sales order data, the demand planner needs to update demand
sensing results with the help of the Demand Sensing Update forecast model.
Task 1:
1. Create a new forecast model consisting of a Forecasting step only. Use the data in the
following table.
Fields Value
Planning Area ZSAP6
Model Name DemandSensingUpdateRun##
Periodicity Days
Forecast Periods 42
2. Add the Demand Sensing (Update) statistical algorithm, configure the settings, and save
the model. Use the data from the following table.
Fields Value
Main Input for Forecasting Steps Requested Qty
Target Key Figure for Forecast Sensed Demand Qty
Consensus Forecast Consensus Demand without Promo-

tions
Delivered Quantity Delivered Qty Adjusted
Task 2: Task 2: Change the Sales Order Data and Execute the Demand Sensing (Update)
Model in the Excel UI
1. Change your Demand Sensing favorite to include the data in the following table.

Selection Value
Time Days
Key Figures Requested Qty

Sensed Demand Qty
Sensed Demand Qty Adjusted
Filter HT_0##
2. Run the Demand Sensing (Update) model in the Excel UI by choosing

DemandSensingUpdateRun## and view the results. Use the data in the following table.
Fields Value
Time Period Days
Forecast Model to be used DemandSensingUpdateRun##
UoM to ID KG
Filter HT_0##

Unit 8
Solution 19
Run a Demand Sensing Update
Simulation: Run a Demand Sensing Update

For more information on Run a Demand Sensing Update, please view the
Hub.
In the case of changes in the sales order data, the demand planner needs to update demand
sensing results with the help of the Demand Sensing Update forecast model.
Task 1:
1. Create a new forecast model consisting of a Forecasting step only. Use the data in the
following table.
Fields Value
Planning Area ZSAP6
Model Name DemandSensingUpdateRun##
Periodicity Days
Forecast Periods 42
a) Log in to the SAP Fiori UI with the login credentials provided by your instructor.
b) In the Demand Planner group, choose the Manage Forecast Models tile.
c) Choose Create and choose the ZSAP6 planning area.
d) In the General tab, enter DemandSensingUpdateRun## as the Model Name and

Description.
e) In the Periodicity field, choose Daily.
f) In the Historical Periods field, enter 180.
g) In the Forecast Periods field, enter 42.
2. Add the Demand Sensing (Update) statistical algorithm, configure the settings, and save
the model. Use the data from the following table.
Fields Value
Main Input for Forecasting Steps Requested Qty
Target Key Figure for Forecast Sensed Demand Qty

Fields Value
Consensus Forecast Consensus Demand without Promo-

tions
Delivered Quantity Delivered Qty Adjusted
a) Select the Forecasting Steps tab.
b) Choose Requested Qty as the Main Input for Forecasting Steps key figure.
c) Choose Sensed Demand Qty as the Target Key Figure for Forecast.
d) Choose + Add Forecasting Algorithm and choose the Demand Sensing (Update)
algorithm.
e) In Consensus Forecast, choose Consensus Demand without Promotions.
f) In Delivered Quantity choose Delivered Qty Adjusted.
g) Accept the defaults for the rest of the fields and choose Save.
Task 2: Task 2: Change the Sales Order Data and Execute the Demand Sensing (Update)
Model in the Excel UI
1. Change your Demand Sensing favorite to include the data in the following table.
Selection Value
Time Days
Key Figures Requested Qty

Sensed Demand Qty
Filter HT_0##
a) Log in to the Excel UI. If you are already logged in, you need to log out and back in
again.
b) Choose your Demand Sensing favorite.
c) Click Edit View.
d) Choose the attributes and key figures from the table provided.Selection ValueTime
DaysPlanning Level Sales Order, Product ID, Location ID, Customer IDKey figures
Confirmed QtySensed Demand QtySensed Demand Qty AdjustedSensed Demand Qty
FinalFilter HT_0##
2. Run the Demand Sensing (Update) model in the Excel UI by choosing

DemandSensingUpdateRun## and view the results. Use the data in the following table.

Fields Value
Time Period Days
Forecast Model to be used DemandSensingUpdateRun##
UoM to ID KG
Filter HT_0##
a) Choose Run located in the Application Jobs subsection and choose Statistical
Forecasting.
b) In the Time Period field, choose Days.
c) In the Planning Level field, choose Product ID, Location ID, and Customer ID.
d) In the Forecast Model to be used field, choose DemandSensingUpdateRun##.
e) In the UoM to ID field, choose KG as the unit of measure.
f) Filter on HT_0##.
g) Choose Next.
h) Choose Run.
i) Click Status in the Application Jobs subsection to check on the status of the job.
j) Follow the execution status of the forecasting job in the log and wait until it completes.
k) Choose Refresh in Data Input subsection and view the changes to the forecast in the
Excel UI.
l) View the changes in Sensed Demand Qty.

LESSON SUMMARY

Unit 8
Lesson 4
Tailoring the Demand Sensing Algorithm
LESSON OBJECTIVES
Demand Sensing Algorithm Configuration

Demand sensing is typically run daily. It is executed at the product-location-customer level
and the sensed demand is created at the daily time granularity for the time horizon defined in
the forecast model.
The system does the following during a demand sensing run:
1. Optimizes forecast adjustments based on forecast bias.

The system adjusts the future forecast based on its correlations with the demand from the
recent past (at the weekly level).
2. Optimizes forecast adjustments based on open order patterns.

The system adjusts the future forecast based on its correlations with open orders.
3. Disaggregates the weekly forecast.

The system disaggregates the weekly forecast using the daily profiles of the signals and
the optimized weight.
4. Calculates sensed demand.

The system calculates the sensed demand (in other words, short-term demand) using the
optimization results (weights) and the current demand signal values (for example, values
for shipments and open orders).
After demand sensing execution, it is possible to make some adjustments to improve forecast
results. As demand sensing requires detailed configuration, the demand planner needs to
analyze the results and make further adjustments for necessary changes.
For example, it is possible to make some adjustments in the input key figures, such as
Ordered Qty or Delivered Qty or extend historical periods. The demand planner can make
changes to the minimum data points therefore extending the minimum number of historical
data that are required for demand sensing runs.
Another important thing that the demand planner can change are the maximum forecast
increase and decrease. By customizing this parameter, the demand planner can adjust the
influence of demand sensing on the statistical forecast.
LESSON SUMMARY

Unit 8
Lesson 5
Approving the Demand Sensing Result
LESSON OBJECTIVES
Demand Sensing Forecast Approval
Figure 251: Using the Results of a Demand Sensing Forecast
Animation: Using the Results of a Demand Sensing Forecast

For more information on Using the Results of a Demand Sensing Forecast, please
view the animation in the lesson Approving the Demand Sensing Result, online in
The results of demand sensing forecast can be used as an input to IBP Inventory or IBP
Supply. For example, we have an end-to-end process in the SAPIBP1 planning area and
demand sensing is one of the parts. This forecast is more accurate, and it will improve the
results of the planning process. For example, safety stock values will be less because the
forecast error will be decreased. Also, this forecast will influence the manufacturing process –
higher accuracy lets us to produce products that are really necessary and it leads to costs
reducing.

Lesson: Approving the Demand Sensing Result
Figure 253: Approving a Demand Sensing Forecast
That is why final forecast must be agreed between the different lines of business and the
result must be confirmed. As a final step of the demand sensing process, you need to approve
the final demand sensing forecast. In IBP, this is possible with the help of Copy operators.
To do this, you need to create a custom key figure. Then, you need to customize a copy
operator to transfer the approved values in the target key figures.


Unit 8
Exercise 20
Approve the Demand Sensing Result
Simulation: Approve the Demand Sensing Result

For more information on Approve the Demand Sensing Result, please view the
simulation in the lesson Approving the Demand Sensing Result online in the SAP
Learning Hub.
The final demand sensing forecast needs to be approved by management.

Approve the Demand Sensing Forecast as follows.
1. Using your Demand Sensing favorite, add key figure Sensed Demand Qty Approved to
match the data in the following table and update your favorite.
Selection Value
Time Daily
Key figures Confirmed Qty

Sensed Demand Qty
Sensed Demand Qty Approved
Filter HT_0##
2. Approve the demand sensing forecast.

Unit 8
Solution 20
Approve the Demand Sensing Result
Simulation: Approve the Demand Sensing Result

For more information on Approve the Demand Sensing Result, please view the
simulation in the lesson Approving the Demand Sensing Result online in the SAP
Learning Hub.
The final demand sensing forecast needs to be approved by management.

Approve the Demand Sensing Forecast as follows.
1. Using your Demand Sensing favorite, add key figure Sensed Demand Qty Approved to
match the data in the following table and update your favorite.
Selection Value
Time Daily
Key figures Confirmed Qty

Sensed Demand Qty
Sensed Demand Qty Approved
Filter HT_0##
a) Log in to the Excel UI. If you are already logged in, you need to log out and back in
again.
b) In the Planning View section, choose Favorites → Demand Sensing.
c) Choose Edit View → Edit Planning View.
d) Add key figure Sensed Demand Qty Approved and make any changes to match the
data in the table provided.
2. Approve the demand sensing forecast.

a) In the Application Jobs section, choose Copy Operator (Advanced) → Run.
b) Choose the Demand Sensing Fcst Approval operator.
c) On the Filter tab, choose your Prod## filter.

Lesson: Approving the Demand Sensing Result
d) Choose Next.
e) Choose Run.
f) When the operator execution is finished, you can see that the approved forecast is now
copied in the Sensed Demand Qty Approved key figure.

LESSON SUMMARY

Unit 8
Learning Assessment
1. What are the demand signals that are input to Demand Sensing?
Choose the correct answer.
X A The Forecast Signal
X B The Sales Signal
X C The Open Sales Signal
X D All of the Above

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Configuration for Demand

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vii Course Overview

1 Unit 1: Introduction to IBP for Demand

3 Lesson: Introducing IBP for Demand

35 Unit 2: Data Preparation

36 Lesson: Cleaning Data Automatically

57 Lesson: Using Forecast Profiles

119 Unit 4: Lifecycle Planning

120 Lesson: Planning Product Lifecycles

153 Unit 5: Promotion Planning

154 Lesson: Planning Promotions

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180 Lesson: Using Financial Key Figures and Pricing

215 Unit 7: Forecast Accuracy

217 Lesson: Using ABC and XYZ Segmentation

245 Unit 8: Demand Sensing

247 Lesson: Introducing Demand Sensing

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● Explain IBP for Demand

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Introduction to IBP for Demand

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Figure 2: Supply Chain Needs to Adapt to New Business Realities

Animation: Supply Chain Needs to Adapt to New Business Realities

Figure 4: One Person’s Challenge is Another Person’s Opportunity

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Figure 7: Introducing SAP Integrated Business Planning

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Animation: Introducing SAP Integrated Business Planning

Figure 9: The Idea: Simplified Experience, Unified Empowerment

Animation: The Idea: Simplified Experience, Unified Empowerment

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Figure 11: SAP Integrated Business Planning Solution

Figure 12: What Problems Are We Solving?

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Animation: What Problems Are We Solving?

Figure 14: Things Rarely Go Exactly as Expected on the Demand Side

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Figure 15: Introduction to IBP for Demand (1 of 4)

Animation: Introduction to IBP for Demand (1 of 4)

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Figure 17: Intro to IBP for Demand (2 of 4)

Animation: "Predictive" and SAP Integrated Business Planning for Demand

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Figure 20: SAP Integrated Business Planning for Demand: Vision

Figure 21: Mid to Long Term Planning vs Short Term Planning

Animation: Mid to Long Term Planning vs Short Term Planning

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Figure 23: Bridging the Gap Using Demand Sensing

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Figure 25: Simplification – What We Have Heard

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