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We found that there is a option to automatically generate manufacturing order when we create sales order. My question is that, Is there any option in odoo to create manufacturing order on the basis of sales forecast? And to automatically create the raw material requirements? 

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This is a very old question, but the functionality to do this is in Master Production Scheduling (MPS).  This takes sales forecasts (that are manually entered), and proposes manufacturing orders to satisfy demand.  

It also uses the Bill of Material to calculate indirect demand for components.  These could be ordered from vendors or manufactured.

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