Distribute deficit
After a forecast is defined, it is a common occurrence for the actual values to fall short of the forecasted values. The difference between the actuals and the forecast is termed the deficit. With Lumel EPM, you can distribute the deficit among open forecast periods.
To demonstrate this feature, we created a forecast for 2025 Q1 and allocated 4560 million, which was distributed among January, February, and March using weights derived from 2024 Q1. The January forecast has been closed because actual data is now available. The forecast for January is 1525.51 m, but the actual revenue is only 1479.87 m. Let's see how to distribute this deficit with Lumel EPM.
When closing a period, make sure to retain the forecast values by choosing the Retain forecasts option.
1. Select the forecast measure and click the Time > Distribute Deficit option.
Select the measures: From the Measures Compared drop-downs, you can select the measures for which the deficit is being calculated.
In this case, we have calculated the deficit between forecast and revenue. The calculated deficit is 45,641,003.138.
3. Select the forecast measure and distribution range.
If you have multiple forecast measures in your report, from the Distribute to dropdown, select the forecast measure to which the deficit should be distributed. Click on the calendar icon to choose the period for distribution.
Set the distribution method: There are two methods for distribution; we'll look at an example for each of them.
In the example below, both February and March have the same forecast values, so an equal distribution and a distribution by weight would have the same outcome.
The deficit of ~45 million has been distributed equally between the Feb and March forecasts and added to the existing forecasted value.
Let's consider a scenario where the forecasts for Feb and Mar have different values.
a) Distribute equally:
The deficit of ~45m is distributed equally between February and March.
b) Distribute by weights:
The deficit of ~45m is distributed based on the weights of February and March (3:4).
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