D1115 - Demand Classification

Classifications are first based on the items best fit statistical forecast method. If the best fit forecast method is not an intermittent, trend, or trend seasonal method, they're classified as “Other”. Items classified as “Other” are categorized further based on an analysis of their Average Demand Interval (ADI) of Coefficient of Variability (C-VaR).

Parameters are normally set by a System Administrator at the global level, and apply to all product and customer combinations. The parameters are displayed in the Effective Parameters card, but can be adjusted using the fields in the Edit Parameters card.

The page provides users with a breakdown of all products of the classified demand. In this example, for 46 products out of 50, the system has created a best-fit from the statistical forecasting method. For those four products which have been classified as non-intermittent, trend, or trend seasonal, they've been classified with an ADI x CV.

Demand Classification: Classifies products according to the nature of their demand.  This complements ABC-XYX, and addresses some of its shortcomings.

The method is:

• If available, the stat forecast will be used to classify products as Trend, Intermittent, or Trend Seasonal
• Products which do not fall into those three categories are then analyzed based upon their Average Demand Interval (ADI) of Coefficient of Variation (CV).

The table below highlights all products which are captured in the graph on a row-by-row basis. It states the products best fit demand classification, the calculated demand classification, and effective demand classification (which is included in the graph above).

The table also lists statistical scoring of standard deviation, CV and ADI.

Finally, if the box is ticked in the eligibility column at the end, this means the product has a forecast best-fit from the statistical forecast method. In this case, forecast trend is seasonal.