Forecast - Forecast - Reactivity

Determines how much emphasis is placed on recent sales months in contrast to older sales history.

Forecasts set to High will react more quickly to recent changes in demand than forecasts set to Low.

For businesses with rapidly changing demand patterns, a setting of High may be preferred.

The forecast will be significantly weighted towards sales over the last 3 months.

A setting of Low will give a reasonably flat weighting to sales over the last 12 months.

This may work well for businesses with sporadic demand that needs to be assessed over longer timeframes.

For most businesses, it is best to leave this setting as Medium, which offers a balanced approach.

The setting High will place a much greater weighting on the last 3 months of sales,
​Medium will extend the higher weighting out to 6 months,
and Low will offer a flatter weighting across 12 months of history.

Does this mean that a setting of High, Medium, and Low applied to the sales history below will result in the following forecasts?

High

Medium

Low

It is not quite that drastic. The keywords here are higher weighting.

A setting of High still considers all the sales history, it just applies a higher weighting to the more recent sales history.

High

Medium

Low

⚠️ Note: This is not the actual formula or calculation. It is a simplified example to illustrate how the different settings may result in different forecasts.

Question: What if I set my Reactivity to “High” and my forecast shoots through the roof?
​Answer: You can limit how much your forecast grows or declines by using the two settings: Maximum growth (%) and Maximum decline (%).