Minimum Version Required: 26.04
Pre-Conditions
To include historical backorders and backfills in your current forecasting projections, the Exclude Backorder configuration setting must be set to False.
Steps
When generating sales forecasts, the system can account for historical demand that was not immediately met due to past stockouts. Instead of basing future projections solely on completed sales, you can instruct the system to calculate true customer demand.
When the Exclude Backorder setting is False, both System Forecasts and User Forecasts calculate expected future volume using the following logic:
The system calculates your total historical demand by taking the sum of your historical volume: (Last Year Sales + Last Year Backorders + Last Year Backfills).
It applies your selected forecasting trend percentage (e.g., a 4-week trend or 6-week trend) to this total historical demand.
If forecasting by average, it appies the averages based on Last Year Sales + Last Year Backorders + Last Year Backfills as well.
Setting the Exclude Backorder can be configured in two ways:
Use the exclude backorder dropdown for each product/location in the forecasting dashboard
Use the edit/filldown functionality in table view and edit the exclude backorder column from the inventory table.
See the example where a 4-week trend for a product is +20.00%
Description | Values |
4-week Trend | +20.00% |
Last year sales | 150 |
Last year backorders | 20 |
Last year backfills | -5 |
Total when Exclude Backorder = False | 165 |
Total when Exclude Backorder = True | 150 |
Sales Forecast when Exclude Backorder = False | 198 |
Sales Forecast when Exclude Backorder = True | 180 |
Fields And Definitions
Exclude Backorder: A configuration setting that dictates how historical data is utilized. When True, the forecast relies strictly on closed historical sales. When False, the forecast includes previous backorders and backfills to represent total true demand.
System Forecast / User Forecast: The final projected numerical value generated by the system based on the selected time period and historical data parameters.
Forecast Method / Trend: The calculated rate of market growth or decline over a selected period (such as 4 weeks or 6 weeks) that is applied to your historical totals.
Best Practices
Forecast True Demand: It is highly recommended to include backorders and backfills in your calculations if you frequently experience out-of-stock scenarios. This ensures your future inventory replenishment aligns with true market demand rather than being artificially lowered by previous inventory shortages.