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Consider the following scenario:

  • I have a top line revenue forecasts in dollars for each of my corporate divisions or business units.
  • I have capacity forecasts for each of my regional manufacturing and distribution centers, measured in resource utilization (labor shits × resources needed × ...)
  • I have unit demand forecasts, measured in number of units sold per product category/sales location.

I would like to reconcile these forecasts using an optimal reconciliation approach, but how do I do that given that these forecasts are not described in the same units of measure?

Simply using a multiplicative constant (e.g. taking an average unit retail $ and multiplying it by the sum of all units for the whole division) seems a little bit too simplistic. Is there a better approach?

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