These instructions will show you how to create a Seasonal Profile on the Product History screen. Note the following steps begin on the Product History screen for a product that is suspected to have seasonality.
Step 1: Review The History
To determine if a product is seasonal, it is essential to understand how to compare history. To ensure that the current year’s history is included when testing for seasonality, a year begins with the most recently completed period of history and goes back 12 months or 13 4-weekly periods to complete the year. History for the most recent year (12 months or 13 4-weekly periods) will be called ‘Year 1’. History for the year (12 months or 13 4-weekly periods) before Year 1 will be labeled ‘Year 2’. History for the year before Year 2 will be called ‘Year 3’.
The Demand Pattern is built from two years of history (or three years if it exists) and is used to predict how future years will map seasonally. We use the history only if there is history for every period (zeroes count). The Demand Pattern appears directly under the historical periods in reverse image.
The Demand Pattern is built using algorithms that weigh the most recent Year 1 more heavily than Year 2, and weigh Year 2 more heavily than Year 3. These algorithms also understand business growth or business decline from year to year.
If less than two years of history exists for a product, then the Seasonal Pattern is built from the most recent year of history (Year 1).
See How the Seasonal Pattern is built for a more detailed explanation.
Step 2: Consider the Seasonality Analyzer
Now that you understand how the system will analyze Product History to find seasonality, select Seasonality Analyzer. This action will run a series of statistical tests to observe how Year 2 and Year 3 compared to Year 1, and also to observe how the largest three months in a row compared to the smallest three months in a row.
After selecting Seasonality analyzer, a window will pop up like the one pictured below:
This window will tell you if the history data passed the seasonality test. If it did not, it says “Numbers in Red Failed Test.” If that is true, look at those lines to see why it was rejected and remember this is just a guide, not a final judgment.
The Seasonality analyzer is only a guide to help you decide if a product needs a seasonal profile. You still have control to override the system and choose which products are indeed seasonal.
Step 3: Analyze the difference the Seasonal Profile will make
Now Select Create Seasonal Profile to begin the process of generating a new Seasonal Profile. Review the difference in the current average and deviation.
You will now be in ‘Create Seasonal Profile’ mode, and the system will show you what this product’s Seasonal Profile will look like based upon the existing history.
The Seasonal Profile (displayed in green) tells you what percentage of the Average the demand is expected to be for that particular month. It appears under the Composite line as a percentage. In our example, the first period has a Factor of .14 or 14%. The factor means 14% of the average is used for period 1.
If you would like to change the Factor values, you can use the Composite line as your scratch pad. Remember that the Demand Pattern does not keep any of the changes you make to it during simulation; only the values in the Seasonal Profile get saved when you generate a new profile.
You are also able to see how the Average and Deviation will change if you accept the profile.This change reflects a more accurate based average (where the Factor = 1.00). This difference indicates how well the seasonal profile matches history and will enable us to carry less safety stock.
Step 4: Create the Seasonal Profile
If you would like to save the profile shown on the Create Seasonal Profile page select Save and then Accept Profile.
After accepting the profile, the Accept Seasonal Profile window will pop up. This window will contain a sequentially assigned Profile ID# and a description. You can change both the Profile number and description fields to include text that is more meaningful for you.
The window below shows the default values supplied by the system:
To save the Profile select Accept Profile. If you do not want to keep this Profile select Cancel.
After accepting the Profile, you will see the Profile name and the factors associated with this Profile appearing on the Product History screen. You will also see the Profile ID number and activation date along with a big message above it saying a Seasonal Profile has been Activated for the Product.