Forecast Studio - Scenarios With Binary Independent Variables

[andreas_zaras]

Hello,

I have a hierarchical data set (three levels of hierarchy - Whole Company/ Product Type/ Product Item/ Region) ) that contains a dependent variable (demand) an independent variable (price) and a binary independent variable (BOGOF). For the variable price i have set the aggregation and accumulation options to "average" and for the BOGOF variable i have set them to "maximum value". The forecasts are produced automatically and then i select one node from the bottom level of the hierarchy to do some scenario analysis based on the binary independent variable. The system has extrapolated into the future all the variables including the binary independent variable. The result is that the extrapolated values of the BOGOF variable take decimal values between 0 and 1 which do not make any sense. The desired result would be that the extrapolated values of the BOGOF variable take the value of 0 and so as the analyst could make what if scenarios by chnaging some of them to 1.

Is there a way to tell the system not to extrapolate a specific independent variable but to set its future values to 0?

Thanks in advance,

Andreas

[udo_sas · Accepted solution]

Hello Andreas -

I suspect BOGOF stands for "buy one get one free" and as such it is an indicator about promotional activities.

In my mind you don't want to forecast the values of BOGOF in the first place - as you are really controlling when this promotional activity will occur again in the future, right?

If you provide future values for your independent variable yourself (as you should in this case in my opinion) SAS Forecast Studio will use these values and not try to create a forecast for the independent variable.

Hope this makes sense,

Udo

[andreas_zaras]

Hello Udo,

Thanks for your answer! Everything clear now!

Andreas