Seasonal Factors Estimation

Overview

Seasonal factors measure the average ratio of monthly data to the corresponding underlying trend value. They are important in the following areas:

• Adjustment of historical data before the fitting of trend models
• Calculation of monthly forecasts corresponding to projected trend values
• Re-phasing of existing monthly forecasts

Seasonal factors may be maintained by

• Using statistical analysis of historical actual demand data
• Manual editing via Edit Seasonal Factors

Seasonal factor codes may be created for any combination of items at any level of detail.

Estimating Seasonal Factors

1. From IFP Home select Forecasting > Seasonal Factors Estimation
2. Select the actual demand data that you wish to use for calculation of seasonal factors. This should include at least two years.
   
3. Select Item Type 01 (Sales), seasonal factors estimation should not include the effects of sample movements or free goods
4. You are advised to set the Level of Detail to the variable that best defines each product (normally product group/brand) as products belonging to the same brand tend to have similar seasonal patterns.
5. The Seasonal Factors Estimation dashboard will then open.

Editing a Set of Seasonal Factors

1. Select the item that you wish to update. You may edit the default code if you wish.
2. Set the required Estimation Method.
3. Select the period to be used.
4. Click Re-Estimate. This will then update the seasonal factors based on the new selections made.
5. Seasonal factors can then be manually edited using the Seasonal Factors Editor. Note that:

• Calculated factors may be edited to reflect expert opinion
• The average seasonal factor over the year must be 1.0
• Months with higher than average demand have a factor greater than 1
• Seasonal factors are also translated into an equivalent index and as a % of overall total annual demand.

Note: If changes are made to more than one item then click Re-Estimate All and Save All.