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## Basic and Trend Value Calculation in Trend Model of DP

APO: Advanced Planning and Optimization

Moderators: Snowy, thx4allthefish

### Basic and Trend Value Calculation in Trend Model of DP

Hi All,

I am using Trend model ( Forecast Strategy 21) for generating forecast. For my learning purpose i have created a 12 months demand history from Jan-2004 till Dec 2004. I am generating forecast from Jan2005-Dec2005. As per the model initilization rules, first 3 data points are used to carry out model initialization.When i generate my forecast, I am unable to understand how the first Basic and Trend Value are calcualted i.e Basic and Trend Value for April 2004 only. If i consider the system given Basic and Trend Value for April and if i apply these 2 formula for

Basic Value G(t) = G(t-1) + T(t-1) + Alpha* (V(t)-G(t-1)-T(t-1))
Trend Value T(t) = T(t-1) + Beta*( G(t)-G(t-1)-T(t-1))
Where V(t) is the actual demand history for month t.
Alpha=0.2
Beta=0.3

Basic and Trend Value calculation, i am able to match subsequent months i.e May-Dec 2004 basic and trend value with the above calculated formula value and the system value. But i do not know how to calculate the Apil Month Basic and Trend Value.Any inputs / suggestions, please let me know. Demand history data is given below
January 60
February 77
March 83
April 96
May 105
June 120
July 100
August 94
September 84
October 77
November 60
December 55

Thanks in advance !!

regards,
Pawan.
pawankabra

Posts: 17
Joined: Wed Jan 31, 2007 1:52 am

### Re: Basic and Trend Value Calculation in Trend Model of DP

I'm also looking for the answer to this question. Anyone knows?

gesbaby

Posts: 1
Joined: Tue Sep 22, 2009 1:15 am