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Advanced Inventory Management - Historical versus Seasonal demand

edited Dec 10, 2020 9:10PM in Ask A Guru 3 comments

Hi gurus,

I would like to ask what is the fundamental difference between selecting historical or seasonal demand in the item record in terms of calculation? If you can share an example calculations it would be great. I understand that historical merely calculates based on the demand x historical analysis interval and averages it,

For example:

Given order analysis interval = 3 months or 90 days

Sales past 3 months = 50

Daily demand is then simply 50/90 = 0.56 which is then used as an input for the ROP and PSL calculations.

But what about the seasonal one? Does it incorporate seasonality indices or different calculation to arrive at the ROP and PSL? I do not see much documentation in SA for this and hoping could hear your expertise.

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