In a nutshell: Predecessor-successor relationship

The predecessor-successor relationship is a mechanism used in statistical sales forecasting to assign a virtual history to new items. For this purpose, a so-called predecessor is assigned to a new item, which itself has little or no historical time series of its own and which lends its history to the “successor” before a certain key date. The quality of statistical forecasts of new articles can be significantly improved via predecessor-successor relationships. Many ERP systems allow the creation of predecessor-successor relationships.

Our tip:

In many cases, the predecessor-successor relationship is only used for technical product changes where an old item is replaced by a new item on a specific key date. However, the possibilities of the predecessor-successor relationship go much further. More powerful ERP or forecasting systems allow several predecessors or successors to be created for an item and enable the borrowed history to be scaled by percentage. This means that the behavior of a new item that supplements an existing product group can be composed of the mixed behavior of the previous items in the product group. If your system has a mechanism for entering structure breaks, the cannibalization effect of the successor article on the previous articles in the product group can be stored via structure breaks.

Image: Thrive Themes

Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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