BPI Information Technology System Requirements – Example

Forecasting Overview

Forecasts are generated to provide future sales projections in terms of dollars or units for product groups and individual line items. Forecast periods are usually monthly intervals for one to five years. Forecasting and Master Production Scheduling are frequently combined as one application due to the role which the sales forecast plays in deriving the master schedule.

The forecast results are usually modified by management to include factors which have not been allowed for in the computer program. This modified forecast provides the input to the MPS and is used to develop production requirements for each period. The forecast must be traced and compared with actual sales and revised periodically (at least yearly). In cases where the product sales are seasonal, the forecast will probably be smoothed into a balanced production plan which will provide the input for the master schedule.

Forecasts should be generated for finished good end items only and not for raw material and component parts. The demands for the latter are calculated through MRP.

Functional Requirements

• Enter and maintain historical sales data
• Order date
• items ordered
• quantity ordered
• date shipped
• dollar value of sale

• Develop periodic forecast accuracy measurements by comparing actual sales with the management forecast
• Provide upward and downward forecasting in order to explode a dollar and product     group forecast down to the item number level or roll upward from the item number level to obtain product group and total dollar forecast.
• Provide alternate mathematical forecasting formulas:
• Moving average
• Exponential smoothing
• Arithmetic equation
• Trend
• Trend-seasonal
• Linear regression
• Leading indicators

• Plot forecast data graphically
• Compare forecast to budgets using:
• Average selling price
• Time phased future price

• Provide an unlimited forecast horizon
• Forecast in time periods that can vary in length
• Perform forecast simulation and "what-if" alternatives off-line     and produce a hard copy without affecting original forecast
• Forecast new products which do not have historical data based on management input
• "Force" the totals at the item level to equal the product group forecast
• Automatically consume the forecast with actual customer orders in order to report     on forecast accuracy and/or drive MRP process.
• Enter forecast     data in dollars or units
• Manually override system calculated forecasts
• Maintain a history of frozen forecast revisions
• Calculate forecasts by:
• Constant annual amount
• Historical annual sales
• Historical with     percentage increase
• Weighted average
• Single seasonality factor
• Multiple seasonality factor
• Single average
• Rolling average
• Weighted average

• Generate forecasts for:
• Customers
• Products
• Product Groups
• End Items
• User defined (e.g., divisions, product lines)

• Compute:
• Average selling price
• Time phased future prices
• Gross actual selling price
• Cost

• Forecast for non uniform time periods
• Maintain multiple forecast versions
• Track and maintain seasonality factors and formulas
• Modify     historical data to minimize influence of price increases and     promotions

New financial systems must provide for added integration, functionality and on-line capabilities

General Ledger

• Automatically accept and post journal entries from other systems (payroll, AP, AR, etc.)
• General performance reporting packages based on assigned responsibility reporting organization structure
• Separate and consolidated financial statements for multiple entities

Accounts Payable

• Report cash requirements in future and current accounting periods
• Supervisory approval of payables on-line
• Tracking spending by vendor and product

New financial systems must provide for added integration, functionality and on-line capabilities

Accounts Receivable

• Maintain a customer account on a combined or separate basis for all customer locations
• Assign multiple revenue codes to a single order
• Calculate full debt exposure (unpaid balance plus outstanding orders) for credit limit checking
• Automatically print three different past due notices based on credit balances (30, 60, 90     days)
• BHC also intends to initiate     several new organizational and procedural changes that the new systems must support

Manufacturing

• BHC is planning on adding an additional manufacturing plant in Preston, Idaho within the next year
• Marketing
• All Sales Orders must be approved by a Sales Manager before entry
• Sales Orders will no longer be entered by the Data Entry Clerks, but rather by the Sales Assistants in the Sales Department
• The Sales Assistants will validate the credit status of every account prior to entering the order
• Billing Statements generated     semi-monthly, by the 7th and 21st of each month

BHC intends to initiate several new organizational and procedural changes that the new systems must support

Distribution

• The Warehouse Clerk will reconcile all goods received with a Purchase Order prior to accepting the     shipment from the vendor

Administration

• The Accounts Payable Clerk will print A/P checks weekly
• The Assistant Controller will pre-approve all payments over $50
• Monthly Financial Statements will be generated by the 5th business day after month-end
• The Accounting Clerks in Fruit Heights will enter all their own transactions through remote access and generate their own reports

MIS

• Computer Operators will provide 24 hour/7 days a week system coverage

BHC's technical constraints require the vendor to provide a simple, complete, but low cost solution

• Vendor must provide hardware, software and ongoing maintenance support
• Systems must provide a five year growth track without a major hardware upgrade
• Systems must not require a significant of sophisticated in-house MIS staff to operate
• All systems must be fully integrated
• Software vendor must provide on-line telephone support
• Hardware vendors must provide on-site support
• All system upgrades must be easy to install System vendor must have integrated links to other software packages (manufacturing, distribution, sales, etc.)