Sales and Inventory Forecast in Dynamics 365 Business Central

The Sales and Inventory Forecast extension in Dynamics 365 Business Central enhances inventory management. The extension uses Azure Artificial Intelligence to predict future sales based on sales history to avoid inventory shortage and maintain sufficient working capital. Using a job queue, the user can automatically update predictive forecasts. This blog will explain how to use the Sales and Inventory Forecast extension in Dynamics 365 Business Central.

Where do you find the Extension?

The Microsoft extension is typically pre-installed in “installed extensions”:

The extension is available in both the production and sandbox environments.

The extension considers previous transactional data pertaining to the item and makes predictions with variance ranges for future coming periods.

Sales and Inventory Forecast Parameters

On the Sales and Inventory Forecast Setup page, the user can control key parameters.

Setting Period Type, Horizon, and Stock Warning Horizon determine how far into the future the forecasts cover and when items would run out of inventory. In this instance, stockout warning occurs for up to 3 months out, and the total time covered would be 12 months out.

Under Variance %, the user can control for the deviance in error, plus or minus. Any variances over 40% would lead to the application not making a forecast at all, due to the variance being too high. In this case, the system on the item page, fact box, will generate an error:

The application will also not make a forecast if there is a lack of sufficient prior data. This data is based on item ledger entries, for sale type transactions with items involved.

Expiration Period can set number of days until the forecast disappears, as new forecasts would be made.

Historical Periods indicate how many past prior periods of data for which the application would gather details for future forecasts.

And finally, the Timeseries Model specifies the algorithm used for the time series analysis. More information is available for these models can be found in this Machine Learning Mastery article 11 Classical Time Series Forecasting Methods in Python (Cheat Sheet).

Set Up the Job Queue

Now with the Sales and Inventory Forecast Setup page entered with parameters, set up the job queue. In the Setup page, select new and then select Setup Scheduled Forecasting:

With status on hold, the user can set up parameters to run the sales forecast:

In the above setup, the forecast is run daily overnight, with 3 attempts before stopping should an error arise. When the setup is complete, change the status from on hold to ready via the process tab.

On item cards fast tabs, the forecast will yield a predictive graph:

From the forecast, the user can create purchase documents with quantities pre-filled based on missing quantity to prevent stockout inventory:

If the user creates a purchase invoice and purchase order but does not invoice it and leaves the document open and outstanding, the system will not account for those inventory quantities. Therefore, if the user were to choose to create a purchase invoice or purchase order before posting the prior entries for the item, the system would generate the same quantities for the item. This would also apply to sales documents in the same manner.

Note that during Microsoft updates, sandbox environments may experience the uninstallation of the app.

Contact us if you have any questions about Sales and Inventory Forecast in Dynamics 365 Business Central.