PPC Package

ppc package. The user may select any of the options in this menu according to the activity he is to
perform. Please note that the reports shown in this manual have been generated with test data.
Scope:-
Other modules related to
Material Management
This write-up is meant for introducing the operational details of the four modules (namely
Forecasting,Material Requirements Planning, Vendor Rating and Payments analysis) of the online
PPC system which is currently operational in the ordnance factories.
Forecasting Module
Forecasting module calculates the probable consumption of a maerial in a quarter based on past
consumption of the material. This is done by processing the demand/return notes available in the
computer.
There is provision for calculating average consumption of an item over the period of last 18 months.
It is expected that future consumption can be predicted based on this average consumption. This is
the monthly requirement of an item.
In this it is assumed that the consumption history has equal importance irrespective of its age.
Instead, it is expected that the future consumption will be more close to the consumption in the
recent past, whereas earlier data will have gradually deminishing effect on the forecasted quantity.
So instead of taking 1/18th of the consumption of a material over last 18 months and summing them
up to get the forecast quantity, we take a fraction of the consumption for each of the previous
quarters, the factor having a decreasing value as we go back in the past. This way we calculate the
smooth average consumption quantity for an item.
In addition to the average quantity, looking at the trend of the consumption, it can be predicted
whether consumption is likely to increase or decrease in the future. If we add this trend to the
average consumption, prediction can be expected to be more accurate.
Sometimes consumption may follow a fixed pattern. During a certain period every year there may be
increase or decrease in the consumption. If we do not consider the seasonality then there may be
extra provisioning when the material is not needed or there may be prediction of just the average
consumption whereas expected consumption is more. The seasonality factor in a quarter is
calculated as the ratio of average consumption in the quarter and the average quarterly consumption.
If the average consumption of an item in a quarter is low then this factor will be low and the overall
forecast quantity will also be less. After running the forecasting activity the user will be presented a
report that will give the estimated consumption quantity in a quarter.
For running the forecasting module, first the master which will contain one record for each item that
has been consumed as indirect material in the past, has to built. After that the item history file, which
will summarize the past consumption from the demand/return note file is to be generated. After
generating this file, if it is known that some more consumption history is available in addition to the
Ordnance Factories Institute of Learning, Dehradun 15