Pls find details about Forecast based Planning in MRP :
Forecast-based planning is also based on material consumption. Like reorder point planning, forecast-based planning operates using historical values and forecast values and future requirements are determined via the integrated forecasting program. However, in contrast to reorder point planning, these values then form the basis of the planning run. The forecast values therefore have a direct effect in MRP as forecast requirements.
The forecast, which calculates future requirements using historical data, is carried out at regular intervals. This offers the advantage that requirements, which are automatically determined, are continually adapted to suit current consumption needs. The forecast requirement is reduced by the material withdrawal so that the forecast requirement quantity that has already been produced is not included in the planning run again.
Reducing Forecast Requirements
Reducing forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system also reduces future forecast requirements.
Reducing current forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system does not reduce future forecast requirements.
Average reduction of the forecast requirements
The reduction of the forecast requirements is based on average daily consumption. Actual consumption data is not relevant.
The system calculates the average daily requirement first using the formula forecast requirement/number of workdays in the forecast period.
The forecast requirements are then reduced by the quantity resulting from the following formula: number of workdays worked x average daily requirements.
Period Pattern and Forecast Periods
You can specify the period pattern for the forecast (daily, weekly, monthly or per accounting period) and the number of periods to be included in the forecast individually for each material. It is possible, however, that the forecast period pattern is not specific enough for planning purposes. In this case, you can define per material that the forecast requirements should be divided according to a finer period pattern for planning. You can also define how many forecast periods are to be taken into account during requirements planning. The splitting indicator is defined in Customizing for MRP per plant and per period unit and is assigned to the material in the material master.
For a monthly forecast, the requirements date would be set on the first workday of the month because, for planning, it is assumed that the total requirement must be available at the beginning of the period. You can then divide this monthly requirement into either daily or weekly requirements.
Forecast-Based Planning Procedure
You have set an MRP type for forecast-based planning in the material master (MRP 1 view).
You define MRP types in Customizing for MRP in the IMG activity Check MRP types.
1.The system copies the requirements quantities that it has forecast in the requirements planning run and calculates net requirements. During this calculation, every period is checked to make sure that the forecast requirements are covered either by available stock, by planned receipts from purchasing or by production. If a material shortage occurs, the system generates a procurement proposal.
2.The system calculates the quantity recorded in the procurement proposal according to the lot-sizing procedure that you specified in the material master. Depending on the lot-sizing procedure, several forecast requirements are grouped together into one lot.
3.For every procurement proposal, the system calculates the date on which it must be converted into a purchase order or a production order.
Hope this helps.
It is very simple also transactions used for the forecasting is very less.
As our team members said you have to maintain the material master accordingly.
If the material is set for forecast based planning. Then you have to run the forecast using MP38. If this forecast is executed then for the individual material. You can see the forcast values in MD04. Also in material master forecast values.
Then your normal steps as you follow. Hope this clear your doubt.
1) Define MRP type relevent fro forcasting like VV.
2) Maintain firecasting view in material master with suitable forecast profile.
2) enter the past consumption data in the additional data tab "consumption"
4) now execute the forecast from MP30 or from MM02 forecasting view.
Forecast reqs will be copied in MD04 once you save the material master.
Forecast is Understanding customer demand is key to any manufacturer to make and keep sufficient long lead inventory so that customer orders can be correctly met. Forecasts are almost always wrong but are valuable in giving greater preparedness for actual demand.
You have give consumptional data in material master------ additional data-----consumption.There you gan give you 12 months consumption data.Put MRP type
VV in Mrp1 view. In forecasting view u have to maintain automatic model selection.
Hope clears to you.