What is trailing average in SAP IS-DFO - SAP Order Management for sourcing and availability?

SAP Term: trailing average

• Component: IS-DFO

• Component Name: SAP Order Management for sourcing and availability

• Description: The average value for a goal within a sourcing strategy. The average is calculated for either the last 90 days or since the sourcing strategy has been in effect, whichever time period is shorter.

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• Key Concepts: 
  Trailing average is a method used in SAP Order Management for sourcing and availability (IS-DFO) to calculate the average price of a material over a certain period of time. This method takes into account the most recent prices of the material, giving more weight to the most recent prices. This allows for more accurate pricing decisions when sourcing materials. 
  
  How to use it: 
  To use trailing average, you must first set up the parameters for the calculation. This includes setting the time period for which the average will be calculated, as well as the weighting of each price point. Once these parameters are set, the system will automatically calculate the trailing average price of the material. 
  
  Tips & Tricks: 
  When setting up the parameters for trailing average, it is important to consider how often you need to update your pricing decisions. If you need to make frequent updates, then you should set a shorter time period for calculating the average. On the other hand, if you need less frequent updates, then you should set a longer time period. 
  
  Related Information: 
  Trailing average is just one of many methods used in SAP Order Management for sourcing and availability (IS-DFO). Other methods include fixed price, cost plus margin, and market price. Each method has its own advantages and disadvantages, so it is important to consider which one is best suited for your needs.