Replacement Rate Forecast Method
This method of forecasting generates the forecast at the component part pertaining to the repairs happening at its parent assemblies.
Whenever there is a repair happening at a parent assembly part, the component has a probability to get replaced by some units, or commonly referred to as replacement rate. Hence by virtue of this relationship and knowing how many repairs are happening at an assembly part, we can derive replacement rate forecast for a component part.
Replacement Rate Forecast is calculated as follows:
Replacement Rate Forecast = Replacement Rate * Repair Rate * Parent Part Total Forecast (including Internal & external forecast)
Where:
Repair Rate = (((1.0 - ReturnWashRate) * (1.0 - RepairWashRate) * (1.0 - NffRate + )) + ((1.0 - ReturnWashRate) * NffRate))
Forecasting will no longer generate any demand/forecast variance for the replacement rate forecast stream of the components.
For pairs that have the Use In Multi-Indenture Optimization flag set to TRUE, the historysd, forecasterrorsd, and forecastsd fields on the Forecast Detail page are set to NULL for the replacement rate forecast method.
For all other pairs, the variance calculation calculates forecasterrorsd as follows:
ForecastErrorSD = Sqrt(Sum((Demand(i) - Forecast(i))^2) / (N - 1))
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Each forecast method has constraints, called best fit rules that may make it ineligible for forecasting.
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