What is time series model in SAP SCM-APO-FCS - Demand Planning?

SAP Term: time series model

• Component: SCM-APO-FCS

• Component Name: Demand Planning

• Description: One of three categories of methods used for forecasting. The other two are causal models and judgmental models. Time series models develop forecasts by assessing the patterns and trends of past sales. The key determinant in the selection of a time series model is the pattern of previous sales data. The pattern of sales is the profile or general premise that future sales will mimic past sales - the pattern of past sales needs to be identified and incorporated into the forecast. Once the pattern is identified, the forecaster can select the time series model best suited to that particular pattern. For example, if there is a seasonal influence in past sales e.g. sales are consistently highest in October and April, then a forecasting model that compensates for seasonality should be used i.e. classical decomposition or Winters method. If past sales have small fluctuations with no major pattern or trend, then some type of smoothing model moving average or exponential smoothing mig

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• Key Concepts: 
  Time series models are mathematical models used to forecast future demand for a product or service. They are used in SAP's SCM-APO-FCS Demand Planning component to predict future demand based on past data. Time series models use historical data to identify patterns and trends in order to make accurate predictions about future demand. 
  
  How to use it: 
  Time series models can be used in SAP's SCM-APO-FCS Demand Planning component to forecast future demand for a product or service. The model takes into account historical data such as sales, orders, and inventory levels to identify patterns and trends in order to make accurate predictions about future demand. The model can then be used to create a forecast that can be used to plan production, inventory, and other supply chain activities. 
  
  Tips & Tricks: 
  When using time series models in SAP's SCM-APO-FCS Demand Planning component, it is important to ensure that the data used is accurate and up-to-date. Additionally, it is important to consider any external factors that may affect the demand for the product or service being forecasted. 
  
  Related Information: 
  For more information on time series models and how they can be used in SAP's SCM-APO-FCS Demand Planning component, please refer to the official SAP documentation. Additionally, there are many online resources available that provide further information on time series models and their applications in forecasting.