Using Demand Forecasts for S&OP in Microsoft Dynamics AX 2012: Part 1

Demand forecasts - also termed sales forecasts - often provide a key element of the Sales and Operations Planning (S&OP) game plans for stocked products.    Effective use of demand forecasts involves several interrelated issues, such as the relevant time increments and due dates, forecast consumption policies, and master scheduling logic.  These issues often include translating the sales department's version of monthly forecasts into a workable model of demand forecasts for S&OP purposes.  Many firms have struggled with these issues, and they experience problems in coordinating supply chain activities.   

This two-part article provides suggestions for using demand forecasts within Microsoft Dynamics AX 2012 to support S&OP for stocked products.  It covers the basics of demand forecast information and forecast consumption logic, and the context of a typical business process to maintain S&OP game plans.  Many of the suggestions also apply to AX 2009, and the key differences are highlighted.  These topics are reflected in the following sections within the article.

1. Key Elements of S&OP Game Plans for a Stocked Item
2. Basics of Demand Forecast Information
3. Basics of Forecast Consumption
4. Suggestions for Using Demand Forecasts
5. Other Purposes of Demand Forecasts
6. Key Differences between AX 2012 and AX 2009
7. Summary

The first three sections are covered in Part 1 of the article, and Part 2 covers the remaining sections.  While this article focuses on demand forecasts for stocked items, demand forecasts can also apply to stocked components of configure-to-order and make-to-order products.  A