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    Projection Models and Forecast Metrics
    • 24 Jun 2024
    • 3 Minutes to read
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    Contents

    Projection Models and Forecast Metrics

    • Updated on 24 Jun 2024
    • 3 Minutes to read
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    Article summary

    This article reviews projection models and forecast metrics for Weekly Forecasting.

    Projection Models

    The projection model determines how the system-generated projection will be calculated. See the full list of projection models and calculation definitions below. The 15-minute projections are then rolled up into the projected sales amount for each hour, day, and week.

    Projection Model List

    Projection Model

    Calculation Definition

    Smart Forecast (Current Year)

    Forecasted sales are projected as the average sales by day of the week for the past 8 weeks.
     

    Smart Forecast (YoY)

    Forecasted sales are projected as the previous year's actual sales, adjusted by the daily trend percentage between this year and the previous year.

    The daily trend percentage is determined by taking the average sales by day of the week for the past 8 weeks, then comparing that to the average sales by day of the week for the corresponding 8 weeks in the prior year.
     

    Last Week Actual

    Forecasted sales are projected as the actual sales amount from the same day last week.

    Last Year Actual

    Forecasted sales are projected as the actual sales amount from the same day of the same week last year. 

    Customized

    Forecasted sales are projected as an average of the sales from manually-selected projection dates.

    Imported

    Forecasted sales were imported; the sales projection was not system-generated.

    Selecting a Projection Model

    The projection models available for a location are set on the Weekly Forecast Settings sidesheet. When a weekly forecast is first created, the sales forecast per 15-minute increment is generated using the default projection model for the location. 

    If more than one projection model is available, users can select the projection model to use by clicking on the 'Pencil' icon in the Weekly Forecasting header. 

    Manually selecting a projection model will clear any adjustments made to the forecast. 

    When the projection model is changed, any adjustments made to the forecast will be discarded and projected sales will be recalculated. 

    Customized Projection Model

    When a forecast is generated, the selected projection model will determine which days are used to calculate the sales projection. The Review Projection Dates page displays the dates included and excluded from the calculation. Users with the following permission can add or remove projection dates:

    • Sales & Cash → Forecasts → Weekly Forecasting → Customize Projection Dates

    When projection date adjustments are applied to a forecast week, the projection model for that week is automatically changed to 'Customized'. 

    If the projection model is changed back to a system-generated model, the customized projection model is saved. This allows users to switch back to the customized projection model if needed.

    Only one customized projection model is saved for a forecast week. Any time that projection date adjustments are applied to the forecast week, the customized projection model will be updated and previous versions will be discarded.

    Forecast Metrics

    A forecast metric is the sales metric that the forecast is generated for. 

    Forecast Metric List

    Forecast Metric

    Definition

    Net Sales

    Gross sales minus discounts and returns.

    Gross Sales

    Sales including discounts and returns.

    Using Net Sales & Gross Sales Forecasts

    Throughout the forecasting process, both net sales and gross sales are calculated and stored. Only one metric is displayed on the Weekly Forecasting page at a time. Switching between the net sales and gross sales on the Weekly Forecasting page will discard any unpublished adjustments and recalculate the sales projections. This ensures that all adjustments are made using the same comparisons and units. 

    Publishing the forecast will publish both the net sales and gross sales forecast for use throughout R365. Some areas of R365, such as the Operations Dashboard, will allow the user to select which forecast they are viewing. The Scheduling Calendar will only display the metric used in the published forecast. 

    The labor forecast does not take net or gross sales into account during calculation. The labor forecast is calculated using the Labor Matrix and the displayed forecast's sales amounts. It is recommended to configure each location's Labor Matrix thresholds for the default forecast metric. 

    Selecting a Forecast Metric

    The forecast metrics available for a location are set on the Weekly Forecast Settings sidesheet. When a weekly forecast is first created or is regenerated, the sales forecast per 15-minute increment is generated using the default forecast metric for that location.

    If more than one forecast metric is available, users can select the forecast metric to use by clicking on the 'Pencil' icon in the Weekly Forecasting header. 

    Manually selecting a forecast metric will clear any adjustments made to the forecast. 

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