Limits the forecast decline in comparison to sales history. Dependent on the Reactivity setting: “High” reactivity forecasts will be limited based on more recent sales than “Low” reactivity forecasts.

It’s best to set a maximum growth percentage higher than the maximum decline percentage to allow for rapid growth, but not necessarily for rapid decline that could result in stock-outs. These percentages become a lot more crucial when the Reactivity parameter setting is “High”. See the explanation of the Reactivity parameter.

Again, it is useful to consider the type of business being dealt with and know that the Reactivity parameter and Maximum growth percentage parameter need to be specified with the other in mind.

Pro tip: Leave these settings as the default, have demand planners forecast as usual, see where their forecasts are falling short, and adjust these parameters based on the finding.

Imagine an item with sales history depicting a decline of 20% each month. We would expect the forecast to depict this 20% decline to the previous month’s sales too.

However, if we set a min limit of 10%, our forecast would look a lot more like this:

The images below also assume a Reactivity parameter setting of “High” where the most recent sales carry more weight than those 12 months ago. If our Reactivity parameter setting was “Low”, the forecast would look a lot more like this: