Blackwell Reference Online

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The family bill is a planning bill supporting the forecasting activity. Frequently, companies characterized by high product variety divide products into groups or families in order to simplify production planning and control activities. In particular, to improve the forecast accuracy, many companies form families of products with similar demand patterns, thus shifting the forecast object from many end‐product configurations to few aggregate product/item groups. To use aggregate forecasts they must develop a family bill, i.e., a planning bill containing a product family as a parent and more disaggregated product families as the children. As an example, suppose that a manufacturer produces toys. The family bill contains the family “toys” as parent, the families “scooter,” “bicycle,” and truck” as first‐level child codes, and finally three different scooter families as second‐level child codes. The use of this family bill facilitates the forecasting activity. In fact, the company elaborates sales forecasts on the family “toy,” and then, on the basis of the historical sales data, it evaluates a percentage coefficient (PC) for each child code within the family bill, indicating the percentage of sales volume of the child code on the total annual sales of toys. These coefficients make it possible to automatically disaggregate the sales forecasts of the family “toy,” thus obtaining production ... log in or subscribe to read full text