Dynamics 365 Business Central is a cloud-based ERP system built for comprehensive business management. It facilitates businesses to automate and streamline their business. In addition, it can quickly adapt to industry-specific standards and can be customized according to business needs.
Forecasting customer demand is essential for any business to succeed in today’s competitive market. Dynamics 365 Business Central provides a powerful platform for creating an accurate demand forecast that helps businesses unlock growth opportunities and maximize their resources.
In this guide, we will explore how to create a demand forecast in Dynamics 365 Business Central.
What is a demand forecast?
A demand forecast in Dynamics 365 Business Central predicts customer demand based on historical data, market trends, and industry analysis. An essential tool, it helps businesses plan for customer needs, anticipate demand, and manage resources well.
To ensure customer satisfaction, accurate forecasting is vital in the Master Production Schedule (MPS) process. A business can match forecasts against sales and production orders, and can experiment with ‘what if’ scenarios to optimize their demand planning. In addition, forecasting allows an anticipatory approach to reliably meet deadlines to the benefit of both customers and businesses.
Sales Forecasts and Production Forecasts
You can build sales or production forecasts (together or separately) with the forecasting functionality in the D365 Business Central software. Sales forecasting helps you anticipate orders, while production forecasting finds a feasible turnaround time for the finished goods. With the sales forecast, you can best predict your selling opportunities and the goods you can sell in the future (sorted by item and period).
Forecasts on the Demand Forecast page can also be manually created in the system as it stores multiple forecasts, separating them by name and type. You can copy and edit these forecasts as and when required. However, only one forecast is valid for planning purposes at a time. The forecast consists of multiple records of an item number, forecast dates, and forecasted quantity. For an efficiently planned schedule, the forecasted quantity should be accessible at the start of the demand period.
You must designate a forecast as “Sales Item,” “Component,” or “Both.” “Sales Item” represents sales forecasting, and the Component type represents the production forecast. With the forecast type “Both,” the planner can easily visualize and compare production and sales forecasts in one glance. Though this option would not let you edit the forecast to edit, it allows you to view both figures simultaneously on a single sheet.
A component forecast predicts the demand for parts, components, and resources that go into the production of products or services; it is an option related to a parent item. Component forecasts are usually designed to define options for a parent item.
Note: The component forecast must be equal to or less than the sales item forecast quantity. If not, the system would register the difference between the two types of forecast as an independent demand.
The forecast period for a plan is valid from the start date until the next forecast starts. The time interval page would provide you with multiple choices to insert the demand for a specific date during a period. However, to ensure accurate forecasting, we advise against altering the forecast period as it may displace all entries backward to their initial date.
This feature is a part of the manufacturing setup and provides you filter forecast according to location specific to your location when creating a plan. However, location-based forecasts are viewed in isolation, and you may be unable to view the overall forecast.
Related: Top 7 reasons to migrate to Dynamics 365 Business Central
How to Create a Demand Forecast
Step 1: Choose the icon —> Enter “Demand Forecast” —> Choose the related link
Step 2: Click on the General FastTab —> Choose a forecast in the” Demand Forecast Name field.”[Note: There would be multiple forecasts separated by name and forecast type]
Step 3: Select the location for the forecast in the “Location Filter field.”
Step 4: In the” Forecast Type field,” select Sales Item, Component, or Both.
Selecting “Sales Item or Component” allows you to edit the quantity by period.
You will not be able to edit the quantity if you select “Both,” but you can still click on the drop-down arrow button and view the demand forecast entries.
Step 5: To limit the amount of displayed data, select a Data Filter.
Step 6: In the Demand Forecast Matrix Fast tab, enter the details of the forecasted quantities of “Sales Item” or” Component forecast.”
Step 7: Set the time interval in the” View by field” to change the period that is displayed in each column of the “Matrix Options Fast” tab.
Note: You can also select from the following time intervals: Day, Week, Month, Quarter, Year, or the Accounting Period.
Read also: How to Find the Perfect Dynamics 365 Business Central Consultant
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A Dynamics 365 Business Central implementation can produce the best industry advantages if companies engage a D365 expert to assist with the process. Experienced Microsoft partners know their way around Microsoft ERP implementations, migrations, maintenance, and support. DemandDynamics is a trusted gold partner with a team of trained professionals with in-depth product knowledge. In addition, its famous on-demand services work on a pay-as-you-use model, where you have to pay only for the services you use.
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