Purpose
The purpose of this document is to describe the behavior of the D365FO Supply Forecast functionality when Planning Optimization is configured to include supply forecasts in the Master Plan. Microsoft allows Master Planning to consider supply forecasts through the Include supply forecast option in the Master Plan configuration.
The purpose of this document is to describe the behavior of the D365FO Supply Forecast functionality when Planning Optimization is configured to include supply forecasts in the Master Plan. Microsoft allows Master Planning to consider supply forecasts through the Include supply forecast option in the Master Plan configuration.
Configuration
The following configuration was used during testing:
- Forecast model enabled in the Master Plan
- Include Supply Forecast = Yes
- Planning engine = Planning Optimization
- Coverage planning enabled at inventory dimension level
A Supply Forecast was created for a purchased item and linked to a vendor.
The following configuration was used during testing:
- Forecast model enabled in the Master Plan
- Include Supply Forecast = Yes
- Planning engine = Planning Optimization
- Coverage planning enabled at inventory dimension level
A Supply Forecast was created for a purchased item and linked to a vendor.
Initial Assumption
The initial expectation was that the Supply Forecast would behave as future available supply and therefore directly offset requirements.
Under this assumption, if a requirement of 80,640 units existed and a Supply Forecast of 80,640 units was entered for the same period, no Planned Purchase Order would be created because the forecast would already satisfy the demand.
The initial expectation was that the Supply Forecast would behave as future available supply and therefore directly offset requirements.
Under this assumption, if a requirement of 80,640 units existed and a Supply Forecast of 80,640 units was entered for the same period, no Planned Purchase Order would be created because the forecast would already satisfy the demand.
Actual Behavior Observed
Testing demonstrated a different behavior.
When the Master Plan includes Supply Forecasts, D365FO does not treat the forecast as an existing supply transaction. Instead, Planning Optimization generates Planned Purchase Orders based on the Supply Forecast quantity.
The generated Planned Purchase Orders contain the indicator:
Supply forecast = Yes
This clearly identifies the order as originating from a Supply Forecast.
Testing demonstrated a different behavior.
When the Master Plan includes Supply Forecasts, D365FO does not treat the forecast as an existing supply transaction. Instead, Planning Optimization generates Planned Purchase Orders based on the Supply Forecast quantity.
The generated Planned Purchase Orders contain the indicator:
Supply forecast = Yes
This clearly identifies the order as originating from a Supply Forecast.
Scenario 1: Forecast Quantity Equals Requirement Quantity
Input
- Supply Forecast = 80,640 units
- Requirement = 80,640 units
- Supply Forecast = 80,640 units
- Requirement = 80,640 units
Result
D365FO generated a Planned Purchase Order for 80,640 units.
The Planned Purchase Order was flagged as:
Supply forecast = Yes
D365FO generated a Planned Purchase Order for 80,640 units.
The Planned Purchase Order was flagged as:
Supply forecast = Yes
Observation
Even though the forecast quantity matched the requirement quantity, the system still generated a Planned Purchase Order.
This demonstrates that the Supply Forecast does not behave as existing supply. Instead, it acts as a planning signal that generates procurement recommendations.
Even though the forecast quantity matched the requirement quantity, the system still generated a Planned Purchase Order.
This demonstrates that the Supply Forecast does not behave as existing supply. Instead, it acts as a planning signal that generates procurement recommendations.
Scenario 2: Forecast Quantity Is Lower Than Requirement Quantity
Input
- Supply Forecast = 78,640 units
- Requirement = 80,640 units
- Supply Forecast = 78,640 units
- Requirement = 80,640 units
Result
D365FO generated:
- A forecast-based Planned Purchase Order for 78,640 units.
- Additional planned supply for the remaining shortage.
D365FO generated:
- A forecast-based Planned Purchase Order for 78,640 units.
- Additional planned supply for the remaining shortage.
Observation
The forecast quantity becomes a planned procurement recommendation. When requirements exceed the forecast quantity, Planning Optimization proposes additional supply to cover the remaining demand.
The forecast quantity becomes a planned procurement recommendation. When requirements exceed the forecast quantity, Planning Optimization proposes additional supply to cover the remaining demand.
Scenario 3: Forecast Date Is Earlier Than Requirement Date
Input
- Supply Forecast Date = Day 1
- Requirement Date = Day 2
- Supply Forecast Date = Day 1
- Requirement Date = Day 2
Result
The Planned Purchase Order retained the Supply Forecast date.
The order was then pegged against the requirement occurring on the later date.
The Planned Purchase Order retained the Supply Forecast date.
The order was then pegged against the requirement occurring on the later date.
Observation
Forecast-driven Planned Purchase Orders can cover future requirements while preserving the original forecast date.
Forecast-driven Planned Purchase Orders can cover future requirements while preserving the original forecast date.
Firming Test
The forecast-driven Planned Purchase Order was firmed.
After firming:
- The Planned Purchase Order became an actual Purchase Order.
- The quantity and vendor information were retained.
- The Purchase Order became part of the normal supply plan.
This behavior is consistent with standard D365FO firming functionality, where planned orders are converted into actual orders.
The forecast-driven Planned Purchase Order was firmed.
After firming:
- The Planned Purchase Order became an actual Purchase Order.
- The quantity and vendor information were retained.
- The Purchase Order became part of the normal supply plan.
This behavior is consistent with standard D365FO firming functionality, where planned orders are converted into actual orders.
Functional Interpretation
Based on the tests performed, the Supply Forecast should be interpreted as:
Expected future procurement that should be planned.
The Supply Forecast should not be interpreted as:
- On-hand inventory
- An existing Purchase Order
- A firm supply transaction
- A confirmed future receipt available for netting
Instead, the Supply Forecast drives the creation of forecast-based planned procurement recommendations.
Based on the tests performed, the Supply Forecast should be interpreted as:
Expected future procurement that should be planned.
The Supply Forecast should not be interpreted as:
- On-hand inventory
- An existing Purchase Order
- A firm supply transaction
- A confirmed future receipt available for netting
Instead, the Supply Forecast drives the creation of forecast-based planned procurement recommendations.
Conclusion
The testing performed indicates that when Include Supply Forecast is enabled, D365FO Planning Optimization converts Supply Forecast quantities into forecast-based Planned Purchase Orders.
These Planned Purchase Orders are identified by the field:
Supply forecast = Yes
The generated planned orders are subsequently considered during net requirements calculation and can be pegged against future demand.
If actual requirements exceed the forecast quantity, Planning Optimization generates additional planned supply to cover the remaining shortage.
The testing performed indicates that when Include Supply Forecast is enabled, D365FO Planning Optimization converts Supply Forecast quantities into forecast-based Planned Purchase Orders.
These Planned Purchase Orders are identified by the field:
Supply forecast = Yes
The generated planned orders are subsequently considered during net requirements calculation and can be pegged against future demand.
If actual requirements exceed the forecast quantity, Planning Optimization generates additional planned supply to cover the remaining shortage.
Key Design Principle
Supply Forecasts drive the creation of planned procurement proposals. They are not treated as existing supply transactions that directly offset demand.
Supply Forecasts drive the creation of planned procurement proposals. They are not treated as existing supply transactions that directly offset demand.
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