What is demand influencing factor in SAP SCM-FRE - Forecasting and Replenishment?

SAP Term: demand influencing factor

• Component: SCM-FRE

• Component Name: Forecasting and Replenishment

• Description: An external factor with significant influence on the sales or demand of a product. A demand influencing factor DIF can be quantified either using Boolean logic meaning the factor is active/on or not active/off, or using the metric system meaning that the factor has a particular value at any point in time. By analyzing the value of the DIF or rather how the value has evolved with time along with historical demand figures, it is possible to determine a correlation between the DIF and the demand. This correlation can be used to predict future demands if the future evolution of the DIF is known. Examples Christmas public holidays Vacation Promotion Sales price changes

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• Key Concepts: 
  Demand influencing factors are used in the Forecasting and Replenishment (FRE) component of SAP SCM to help predict future demand. They are used to identify and quantify the impact of external factors on demand, such as seasonality, promotions, and economic trends. The demand influencing factors are used to adjust the forecasted demand to more accurately reflect the expected demand. 
  
  How to use it: 
  Demand influencing factors can be set up in the FRE component of SAP SCM. First, the user must define the influencing factor and assign it a weight. Then, the user must define the influencing factor values for each period. Finally, the user must assign the influencing factor values to each item in the forecast. 
  
  Tips & Tricks: 
  When setting up demand influencing factors, it is important to consider all external factors that may affect demand. This will ensure that the forecast is as accurate as possible. Additionally, it is important to regularly review and update the influencing factor values to ensure that they remain accurate. 
  
  Related Information: 
  For more information on setting up demand influencing factors in SAP SCM, please refer to SAP Help documentation at https://help.sap.com/viewer/product/SCM_FRE/7.5/en-US?task=configure_demand_influencing_factors