CPIM Part 1 Module 2 by APICS

Author:APICS
Language: eng
Format: epub

The APICS Dictionary, 16th edition, defines a backorder as follows:

An unfilled customer order or commitment. A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand.

Data Collection and Preparation Principles

Following some basic data collection and preparation principles will help ensure that forecasts are useful.

One principle of data collection is that the data should be collected in the format in which they will be used in forecasting. Forecasts of demand for production need to use demand estimates rather than ship dates or sales. Forecasts are made to estimate market or organizational demand and therefore customer requests or ship dates provide incomplete information for forecasting. Similarly, if the time bucket will be weekly, then collecting monthly data will be insufficient. The Dictionary defines a time bucket as follows:

A number of days of data summarized into a columnar or row-wise display. For example, a weekly time bucket contains all the relevant data for an entire week. Weekly time buckets are considered to be the largest possible (at least in the near and medium term) to permit effective MRP [material requirements planning].

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