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Supply Chain Management forum
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Planning Optimization | Forecast Reduction

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Will it be possible please to explain the reason behind the below highlighted difference between the deprecate MP and Planning Optimization?
I believe the way that the reduction key in the deprecated Master Planning was more effective and less risky than the one with Planning Optimization,
  • Nigel J Cox Profile Picture
    Nigel J Cox 34 on at
    Planning Optimization | Forecast Reduction
    This is a BIG topic on Yammer Viva Engage. I'm hoping (and suspect) Microsoft will add Forecast consumption based on shipments (whether invoiced or not) in the dynamic period - jus like legacy.
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    lvdtang Profile Picture
    lvdtang 1,216 on at
    Planning Optimization | Forecast Reduction
    Good day,
    I understood that it is for performance reasons...
    Best regards,
    Laurens van der Tang
  • AC-11061435-0 Profile Picture
    AC-11061435-0 8 on at
    Planning Optimization | Forecast Reduction
    Hello Hana,
    Thanks for your feedback.
    In the case where we want to take advantage of Planning Optimization advanced algorithms, but also have accurate proposals taking into consideration all transactions, then which reduction method you would advise?
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    Hana Xue Profile Picture
    Hana Xue Microsoft Employee on at
    Planning Optimization | Forecast Reduction
    The document states that the deprecated master plan adjusts the forecast based on actual sales, while the plan optimization ignores the invoiced and delivered quantities during the process, which will lead to oversupply. From this point of view, the master plan is indeed more effective as you said. However, planning optimization considers more factors and uses more advanced algorithms to more accurately predict demand. It prefers to use inventory levels and forecasted demand to determine the optimal replenishment quantity during the optimization process, rather than making adjustments based on transaction records that have already occurred.
    The official document states that starting with Supply Chain Management version 10.0.32, some companies (legal entities) can be allowed to run plan optimization while other companies continue to use the deprecated master planning engine until they are ready to migrate.  So, you can choose the right solution based on your company's business needs.
    Best Regards,

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