Demand Planning EBS Advanced Planning vs. Demantra Demand Management

1. APRIL 16, 2007 Demand PlanningEBS Advanced Planning vs. Demantra Demand Management Nick Roppolo Principal Consultant Special Thanks to: Glenn Hoormann, Michael Pearson and Gerry O’Sullivan

3. Sony PlayStation 3 What would you do?

4. What would you do? To avoid this….

5. What would you do? And this….

6. What would you do? To get this…

7. APRIL 16, 2007 Demand PlanningEBS Advanced Planning vs. Demantra Demand Management Nick Roppolo Principal Consultant Special Thanks to: Glenn Hoormann, Michael Pearson and Gerry O’Sullivan

8. Sony PlayStation 3 • Major Release of a new product • Demand for product extremely high initially • Selling on E-Bay for 4x retail • Did they Have a Plan?

9. Agenda OBJECTIVES Demand Planning Concepts Discuss EBS Demand Planning Discuss Oracle Demantra Demand Planning • Introductions • Demand Planning: Concepts • Oracle Demand Planning • Oracle Demantra • Q & A

10. Demand Planning: Past and Present

11. Forecasting Engines

12. Focuses the Trading Partner Network on the Consumer Single Demand Forecast across the value chain. Trading Partners share risk of removing supply process constraints. Collaborative Forecasting, Planning and Replenishment (CFPR)

13. Establish a Collaborative Relationship Create a Joint Business Plan Create Sales Forecast Identify Exceptions in Sales Forecast Resolve/Collaborate on Exception Items Create Order Forecast Identify Exceptions to Order Forecast Resolve/Collaborate on Exception Items Create Order Collaborative Forecasting, Planning and Replenishment (CFPR)

14. Collaborative Forecasting, Planning and Replenishment (CFPR)

15. Key Performance Indicators

16. Oracle Demand Planning

17. Oracle Demand Planning

18. Oracle Demand Planning – Key Features • Tight Integration with E-Business Suite • Highly Configurable • Exception Reporting • Measure Forecast Accuracy • Multiple Modeling Techniques

19. Oracle Demand Planning – Measuring Forecast Accuracy • Mean absolute deviation (MAD) • Mean absolute percentage error (MAPE) • Root mean square error (MSE) • Tracking signals

20. Oracle Demand Planning – Modeling Techniques • Moving average • Exponential smoothing • Holt-Winters • Linear models

21. Oracle Demand Planning – Modeling Techniques • Non-linear models • Intermittent demand models • Demand Planning selects the “Best-fit” model

22. Oracle Demand Planning

23. Sony PlayStation 3 Could Sony have predicted this event?

24. Oracle Demantra

25. Oracle Demantra

26. Oracle Demantra – Key Features • Highly Configurable • Superior Analytics • Near Real-time forecast revision • Causal Forecasting • Bayesian Modeling Techniques

27. Oracle Demantra – Causal Forecasting

28. Oracle Demantra –Near Real-time Forecast Revision

29. Sony PlayStation 3 Would real-time forecast revision have helped?

30. Oracle Demantra – Modeling Techniques • ARIX • ARX • Auto-Regression Logistic Model • Holt-Winters

31. Oracle Demantra – Modeling Techniques • Intermittent Markov Chain Monte-Carlo model • Markov Chain Monty-Carlo Model • Logarithmic Markov Chain Monty-Carlo Model • Croston Model for Intermittent Demand • Double Exponential Smoothing model

32. Oracle Demantra – Modeling Techniques • Intermittent Regression model • Multiple Logarithmic Regression model • Logistic Model • Moving Average

33. Oracle Demantra – Modeling Techniques • Modified Ridge Regression model • Naïve model • Multiple Regression model • Models are blended. Bayesian Techniques

34. Oracle Demand Planning

35. Oracle Demantra - Bayes’ Theorem

36. Bayesian Modeling

37. Sony PlayStation 3 What do you do?

38. Questions & Answers

39. Thank you

40. Contact Information “Quite simply, Optimum is the best implementer in the marketplace.” — G, Abatjoglou CFO, ChartOne, Inc. Nick Roppolo Principal Consultant 312.674.4700, ext 8070 nick_roppolo@optimumsolutions.com