AGR allows you to choose how to handle open sales orders in the system.
AGR does not automatically include open sales orders in demand, since this would lead to double counting the demand for the items included in the sales order.
Any shipped sales order becomes part of the sales history that underlies forecasted demand. Future sales orders include items that already have a demand forecast that is based on their sales history, which attempts to predict future sales orders.
You can choose from three options to deal with open sales orders in AGR.
If you select Never, Sales orders are added to AGR as additional information in the Item Card and Reports but are not considered part of forecasted demand.
If you select Always, AGR will add the open sales order quantity to the total demand, so it will feed into all derived calculations (order calculations, days covered, estimated stock, etc.). This option creates the risk of double-counting demand, as explained above.
A potential use case for choosing Always is if you work with open sales orders only for special orders that you exclude from the forecast when the sales order turns into sales history. This would effectively mean that you are letting AGR calculate baseline sales with special orders added on top of demand.
If you select Conditional, AGR includes open sales orders in demand when the sum of the open sales orders for an item is higher than that of the forecasted demand. The timeframe in which those two values are compared is the order period.
AGR interprets this as the item has already sold more for the period than what was forecasted, so it is better to use the sales orders, as these are a more accurate view of demand.
If the forecast is higher than sales orders for the period, AGR assumes these sales orders to already be accounted for in the sales forecast.