What is judgmental techniques in SAP SCM-APO-FCS - Demand Planning?

SAP Term: judgmental techniques

• Component: SCM-APO-FCS

• Component Name: Demand Planning

• Description: Forecasting techniques fall into one of three categories: those that rely on past sales data time series models; those built on a relationship between past sales and some other variables causal models; and those that rely on the subjective assessment of a person or group of people judgmental techniques. Some judgmental or subjective assessment is usually involved in all types of forecasts. For example, decision-makers may create their baseline forecast using a classical time series model, but then adjust this forecast based on their assessments of the likely impact that expected changes in competitors' pricing and promotional activities will have on future sales. The strength of judgmental techniques is that they can capitalize on the experience and savvy of people who understand not only what is currently happening in the marketplace but also what is likely to occur.

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• Key Concepts: 
  Judgmental techniques are a type of forecasting method used in SAP's SCM-APO-FCS Demand Planning component. This method uses expert opinion and subjective judgment to make predictions about future demand. It is based on the idea that people with experience in the field can make more accurate predictions than a purely statistical approach.
  
  How to use it: 
  Judgmental techniques can be used in SAP's SCM-APO-FCS Demand Planning component to make predictions about future demand. The user must first identify the experts who will provide their opinion and judgment on the forecast. The user then collects the data from these experts and uses it to create a forecast. The user can also use statistical methods to refine the forecast if necessary.
  
  Tips & Tricks: 
  When using judgmental techniques, it is important to ensure that the experts providing their opinion and judgment are knowledgeable and experienced in the field. Additionally, it is important to collect data from multiple sources in order to get a more accurate forecast. Finally, it is important to use statistical methods to refine the forecast if necessary.
  
  Related Information: 
  Judgmental techniques are just one of many forecasting methods available in SAP's SCM-APO-FCS Demand Planning component. Other methods include time series analysis, causal analysis, and simulation. Each method has its own advantages and disadvantages, so it is important to choose the right one for your specific needs.