What Is a Forecast Type in Planning? EDGEBIC Definition

A forecast type labels a demand forecast as Sales, Production, or Consumption, telling the planning system what kind of future expectation the quantity represents. A Sales forecast is customer-facing demand, we expect to sell 200 units. A Production forecast is an internal build plan, plan to build 220 to cover scrap. A Consumption forecast is a raw material or component usage estimate, expect to use 500 kg of steel. The type is what gives an otherwise bare number its role in the plan.

This entry is part of the EDGEBIC by User Solutions glossary series; for the broader vocabulary of planning, see the manufacturing glossary. For the netting rule that pairs with it, see what is forecast consumption.

How a Forecast Type Works

A demand forecast is a planner-entered quantity for a product in a future time bucket. On its own it is just a number and a date. What that number means depends on what it is a forecast of, and the forecast type is how the planner declares that.

The three types split the expectation cleanly. Sales is the outward-facing figure: the demand you anticipate from customers. Production is the inward-facing figure: what you intend to actually build, which may exceed sales when you have to cover scrap or yield loss. Consumption is the material figure: how much raw material or how many components you expect to draw down.

Keeping these separate matters because they are not interchangeable. A plant that expects to sell 200 units and loses 10 percent to scrap must build more than 200, but it should not report to sales that it expects to sell 220. Labeling each forecast by type lets the plan hold all three expectations at once without confusing what you sell with what you build or what you consume.

A Concrete Example

A product line expects steady demand next quarter. The commercial team records a Sales forecast: we expect to sell 200 units. That is the customer-facing number, and it feeds the demand side of the projection.

The plant, though, knows it scraps roughly one part in ten. To ship 200 good units it must start more, so operations records a Production forecast of 220, capturing the intent to build above the sales figure. And because each unit consumes steel, the materials planner records a Consumption forecast of 500 kg for the period, describing expected raw-material use.

Three forecasts, three types, one product, one period, no confusion. The Sales figure stays honest about demand, the Production figure carries the scrap allowance, and the Consumption figure tracks material, each labeled so the plan reasons about it correctly.

How EDGEBIC Uses It

A forecast type is a field on a demand forecast row, and it classifies the expectation the row carries:

• Sales forecasts represent customer-facing demand and feed the demand side of the inventory projection.
• Production forecasts represent internal build intent, useful when you plan to build more than you sell to cover scrap or yield.
• Consumption forecasts represent expected raw material or component usage, kept separate from finished-goods figures.

The type says what a forecast is; forecast consumption then decides how a Sales forecast and the real orders arriving against it are netted so demand is not double-counted. To enter a forecast and set its type, follow how to enter a demand forecast.