Reduction key fixed month in Dynamics AX

The Reduction key is the period table for forecasting and master planning.

Most companies forecast in monthly buckets, a few get down to weeks, and I worked with a company once where the forecast was loaded in for every 2 weeks. Once the forecast is loaded, the typical process is that sales orders are netted off against forecast. If we’re going to do that we need to know which forecast relates to which sales order.

Dynamics AX master planning uses the Reduction key table. That was the only option in AX 2009. There’s a setup option on the Master plan:

Both the ‘Percent’ and ‘Purchase/sales order’ Reduction principle are driven by Reduction keys.

But AX 2012 offers a fourth option ‘Transactions – dynamic period’:

‘Transactions – dynamics period’ doesn’t use a Reduction key. The forecast records themselves define the period – a forecast period starts on a forecast record, and ends on the next period.

But whenever a company tells me that they forecast in calendar months I still tend to use Reduction keys, because it’s a simple and robust setup for monthly forecasting.

The Reduction key is defined on the Coverage group. It’s an optional field, but don’t leave it blank or you will find that sales orders aren’t netted off against forecast (the demands are just added together).

Where did that Reduction key come from? Master planning > Setup > Coverage > Reduction keys:

As you can see there’s a Wizard. Click the button and step through the setup. Not much to do on the first screen except click Next:

The next form lets you define the length of your buckets (e.g. months); the number of buckets (periods or reduction key lines) you wish to create; and whether the periods have a fixed start date or start on the current date.

This week I learnt to leave the Opening date blank, and I normally set the number of periods so that I’ve covered the forward time horizon for master planning, with plenty to spare, (although really when you think about it, you really only have to cover the forward time horizon of your open sales orders, not forecasts):

On the next form you define the Reduction key ID and a Description:

Then we’re given a preview:

… and a summary:

And Finish creates the Key and the Lines:

Now for the clever bit. As I said, until this week I never used to leave the Opening date blank. I suppose I was conditioned by the AX 2009 demo data which looked like this:

And then I reminded everyone that the Reduction key setup Opening date needs to be re-set once a year.

But as you can see from my AX 2012 screenshot above – you don’t have to enter an opening date. Leave it blank and the system just uses 1st January of the current year. Simple! But don’t setup the Reduction key with only 12 monthly periods, because that’ll give you issues as you get into December (or earlier if you have a long forward open order book).


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