Slow Moving Demand

Slow Moving Demand is used to calculate the optimal stock level for sporadic data. The forecasting method works well with items that consist of many zeroes and items that have variable non-seasonal demand. Croston forecasting method assumes that demand has a normal distribution; Slow Moving Demand assumes that all demand has some Seasonality. 

When this forecast method is used the if the Safety Stock opinion line is used in any of your reports, including the DRP reports, the Safety Stock will be taken from the calculations provided by this forecast method.

To use the Slow Moving Demand forecasting technique:

1. Click  and open the ForecastingExamples.xls file.
   Note: The ForecastingExamples.xls file is a data example to demonstrate how the Slow Moving Demand method is used. For your company’s purposes, you will have your own data available.
2. Click the SlowMethod tab at the bottom of the Excel sheet to select the example spreadsheet.
3. Click in a cell containing data and open ForecastX™ by clicking  . ForecastX appears. 
4. Click the Forecast Method tab.
5. From the Forecast Technique menu, scroll through the list of methods and select Slow Moving Demand. The Slow Moving Demand Forecasting technique appears.
   
6. Enable the Edit Parameters checkbox to activate Slow Moving Demand’s parameters.

There are two different types of configurations. Each works in the same way. However, the step by step configuration walks you through the process and provides information to help you make the best selections.

Step by Step Configuration

Please see the Express Configuration section below for detailed information on each selection provided. To use the Step by step configuration:

1. From the Forecast Method tab, click Step by step configuration.
   

   The Stocking Level window appears.
   

2. Click the forward arrows to go to the next step. The Event Index Creation window appears.
   
3. In the Event Index Creation section, select either Seasonal or Std Bucket to define the Seasonality. If you selected Std Bucket, enable the Exclude 0 checkbox if you do not want zeroes in the Event Index creation.
4. Enter the Start, Increment, and End values. 
5. Click the forward arrows to go to the next step. The Number of Simulations window appears.
   
6. In the Number of simulation section, select either Fixed or % of threshold. Enter a number for either option selected. 
7. In the Event Replaceable section, select Yes or No.
8. Click the forward arrows to go to the next step. The Best Calculation Method window appears.
   
9. In the Base Calculation Method section, select either Mean or Croston. If you chose Mean, enable the Exclude 0 checkbox if you do not want 0 to be part of the calculation.
10. Click the forward arrows to go to the next step. The Base Forecast Method window appears.
    
11. In the Base Forecast Method menu, select either Same or Other. If you chose Other, select a forecasting method from the menu.
12. Click the forward arrows to go to the next step. The Service Level As window appears.
    
13. In the Service Level As menu, select either % of Total or Std of Sample.
14. Click the forward arrows to go to the next step. The Safety Stock window appears.
    
15. In the Safety Stock section, enter the Lead Time. 
16. Select a percentage level in the Level-50 menu.
17. Click the forward arrows to go to the next step. The Service Level in History window appears.
    
18. In the Service Level in Hist As section, select either % of Amount or % of Periods.
19. Click Finish. 

Express Configuration

To use the Express Configuration:

1. From the Forecast Method tab, click Express configuration. The Slow Moving Demand window appears.
   

The table below details what each feature means. See the Step by Step Configuration section above if you would like to see how the Slow Moving Demand walks you through the selections provided.

Feature	Description
Event Index Creation	Defines the Seasonality.
Seasonal	Identifies the data is cyclical. Enter the number of periods that define the season cycle.
Std Bucket	Creates an Event Index based on the Mean and the Standard Deviation in the data.
Exclude 0 (Event Index Creation)	Excludes the leading zeroes in the calculation.
Start	Enter the first value in the range for the Event Index.
Inc	Defines the amount of lift from period to period that should be included in the Event Index.
End	Enter the last value in the range for the Event Index. The value should be at least two points greater than the Start value.
Base Calculation Method	Determines the method used to calculate the historical baseline for the Event Model.
Mean	Uses the mean as the historical baseline.
Croston	Calculates the historical baseline using the Croston Method.
Exclude 0 (Base Calculation Method)	Excludes zeroes in the calculation.
Service Level As	Defines the Safety Stock levels.
% of total	Sorts the simulated values in ascending order and then selects the value that is tied to the percentage specified. Uses the percentage that you entered in the Safety Stock Level value.
Std of Sample	Determines if the Standard Deviation of the simulated data is to be used as the Service Level for Safety Stock. Assumes that the data follows a normal distribution.
Service Level in Hist As	Calculates the historical service level, if the Safety Stock value in the past is the same as the Forecasted Safety Stock value.
% of Amount	Calculates the historical service level in a percentage of the total history. Divides the total history under/out of stock by the total demand in the History.
% of Periods	Calculates the percentage of periods that were either under/out of stock. Takes the total history periods that were under/out of stocks and divides it by the total demand periods in the history.
Number of simulation	Determines the number of simulations performed when generating the Event Index values.
Fixed	Indicates that a specific number of simulations are performed.
% of threshold	Sets a threshold for the variance that indicates the simulation should end. When the variance percentage between the current number generated and the previous number does not exceed the threshold, the simulation process is stopped.
Event Replaceable	Specifies whether the same period’s value can be used more than once when evaluating the data for a seasonality index.
Base Forecast Method	Determines the forecasting technique used to calculate the forecast values.
Same	Identifies that the same forecasting technique (Mean or Croston) used to calculate the historical baseline is also used to calculate the base forecast.
Safety Stock	Defines the parameters used to calculate the Safety Stock values.
Lead Time	Number of periods of future demand that is to be kept in reserve.
Lead - 50	Percentage of periods of future demand that is to be kept in reserve.