Modeling demand

Product demand is the collection of requests from the customer for product to be sold for revenue. Customer demand information is sent through the network using Site and Customer Sourcing Policies until a site in the network can satisfy the demand. The product is then sent back to the demanding customer using Transportation Policies.

You can model both historical demand and forecast data using input tables in the model:

• Customer Orders – Use the Customer Orders table to model historical demand for products by customers. You define the amount or product ordered by day or offset from the start of the model horizon. You can override the price, weight and volume of the product as specified in the Products table.
• Site Orders – Use the Sites Orders table to model historical demand for products by sites. You define the amount or product ordered by day or offset from the start of the model horizon. You can override the price, weight and volume of the product as specified in the Products table.
• Customer Demand – Use the Customer Demand table to model forecast data for products at customers. You can define an offset from the start of the model horizon, or from the start of a specific period. In addition to the basic demand values, you can apply seasonality and demand trends.
• Site Demand – Use the Site Demand table to model forecast data for products at sites. You can define an offset from the start of the model horizon, or from the start of a specific period. In addition to the basic demand values, you can apply seasonality and demand trends.

You determine whether the solvers use Orders or Demand with the Customer Model Demand and Site Model Demand options in the Run Options for each solver.

Generating forecast demand from Orders tables

Demand Elements

Demand consists of these key elements:

• Customer. The customer that demands the product. You can create site-specific demand in the Site Demand table.
• Product. The specific product demanded by the customer or site.
• Quantity. The amount of this specific product demanded by the customer or site.
• Time. The time when the customer places the order and, optionally, the due date when the order must be fulfilled. Simulation uses the due date to determine if the shipment is on time. In Customer Demand, time is based on an offset from the start of a period (or model horizon). In Customer Orders, time is an offset or an actual order date.

Each demand record must include all elements above to be complete.

The following are sample Customer Demand records: