What is lumpy demand in SAP SCM-APO-FCS - Demand Planning?

SAP Term: lumpy demand

• Component: SCM-APO-FCS

• Component Name: Demand Planning

• Description: Also known as irregular, random, sporadic or intermittent demand. Lumpy demand refers to sales history that has periods of large volume spikes followed or preceded by periods of low or zero volume. For example: Jan Feb Mar Apr May June 0 12 10 0 0 24 Lumpy demand might occur with spare parts or equipment that is ordered in batches to replenish downstream inventories.

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• Key Concepts: 
  Lumpy demand is a term used in SAP's Demand Planning component of the Supply Chain Management-Advanced Planner and Optimizer (SCM-APO) module. It refers to the irregular and unpredictable nature of customer demand for certain products or services. This type of demand can be difficult to forecast accurately, as it is often subject to sudden changes in customer preferences or external factors such as weather or economic conditions.
  
  How to use it: 
  In SAP's Demand Planning component, lumpy demand can be managed by using statistical forecasting methods such as exponential smoothing or moving average. These methods are designed to take into account the irregular nature of lumpy demand and provide more accurate forecasts. Additionally, the Demand Planning component also provides tools for analyzing customer behavior and trends, which can help identify potential changes in customer preferences or external factors that may affect demand.
  
  Tips & Tricks: 
  When dealing with lumpy demand, it is important to remember that forecasting accuracy is key. To ensure accurate forecasts, it is important to regularly review customer behavior and trends, as well as external factors that may affect demand. Additionally, it is important to use the most appropriate forecasting method for the situation, as different methods may be better suited for different types of lumpy demand.
  
  Related Information: 
  For more information on SAP's Demand Planning component and how to manage lumpy demand, please refer to the official SAP documentation at https://help.sap.com/viewer/product/SCM_APO_FCS/latest/en-US.