*Intended learning outcomes: Differentiate between various areas of applicability of forecasting techniques.*

In Figure 10.5.1.1, the techniques discussed in Section 10.2, Section 10.3, and Section 10.4 are compared according to a number of criteria.

**Fig. 10.5.1.1** Areas of applicability of forecasting techniques.

When choosing a forecasting technique, it is crucial to find that technique (reasonable in use) that will provide the greatest accuracy of alignment to the demand structure.[note 1008] The following criteria also play a role:

- Adaptability to demand performance
- Possibility of forecast errors
- Aids required
- Expense for data collection and preparation for analysis
- Ascertainability of parameters that describe the performance of the system to be forecast
- The purpose of the forecast and the importance of one material position
- Forecast time frame
- Transparency for the user

## Course section 10.5: Subsections and their intended learning outcomes

##### 10.5 Using Forecasts in Planning

Intended learning outcomes: Produce an overview on the choice of suitable forecasting technique. Describe consumption distributions and their limits, continuous and discontinuous demand. Explain demand forecasting of variants of a product family. Present safety demand calculation for various planning periods. Disclose the translation of forecast into quasi-deterministic demand.

##### 10.5.1 Comparison of Techniques and Choice of Suitable Forecasting Technique

Intended learning outcomes: Differentiate between various areas of applicability of forecasting techniques.

##### 10.5.2 Consumption Distributions and Their Limits

Intended learning outcomes: Identify variables for a consumption distribution. Present expected value and variance of the consumption distribution. Explain distribution function, expected value, and variance of the consumption distribution under the assumption of a Poisson distribution for the frequency of events.

##### 10.5.2b Managing Discontinuous Demand, or Lumpy Demand

Intended learning outcomes: Describe the demand filter to handle a discontinuous demand due to infrequent large issues. Disclose effects of length of statistical period on demand fluctuations.

##### 10.5.3 Demand Forecasting of Variants of a Product Family

Intended learning outcomes: Describe the option percentage. Explain the formulas for forecasting demand for variants.

##### 10.5.4 Safety Demand Calculation for Various Planning Periods

Intended learning outcomes: Identify variables for safety demand calculations. Explain expected value and standard deviation with continuous demand. Describe expected value and standard deviation over n statistical periods.

##### 10.5.5 Translation of Forecast into Quasi-Deterministic Demand and Administration of the Production or Purchase Schedule

Intended learning outcomes: Identify safety demand. Explain independent demand as total demand including safety demand, taken as a function of the planning period to be covered.