Your question is hard to respond to as it lacks sufficient detail. 

 Take a look at parameters In General parameters, Chapter STO->Group SCH and Chapter GPA->Group LOA.

Check also on product site, Planning tab, Planning block for firm and demand horizon.

An example of a demand horizon of 2 weeks, and forecasts ignored in the demand horizon.

Thanks a lot - this is clear -  i have left a message for Julien up and i would love to get your opinion as well on the parameters in general for a our business process .

our contracts generally are anywhere between 120 to 150 days based on firm cllinet sales orders and then its always non-binding forecasts , yet our site is designed to purchase componants according to annual budgets and rolling monthly forecasts . 

Thanks a lot - this is clear -  i have left a message for Julien up and i would love to get your opinion as well on the parameters in general for a our business process .

our contracts generally are anywhere between 120 to 150 days based on firm cllinet sales orders and then its always non-binding forecasts , yet our site is designed to purchase componants according to annual budgets and rolling monthly forecasts . 

That's interesting. Is there a way to reverse that? In other words, inside the demand horizon use the greater of forecast or firm and outside the horizon add them together? Still a newbie here...

I am actually here to figure this out now ! 
i want to know how it works within the firm horizon 

First, I want to be clear that Demand Horizon is different from Firm Horizon.

MRP first look at the demands, and Demand Horizon plays a role on what you considered as demand. 

Once the demand is determined, MRP then calculates and plans purchases/production to support that demand. That's where Firm Horizon comes in. Firm Horizon set a time frame where you tell MRP that you don't want any new suggestions regardless of the demand. In some production environments, sometimes the cost for schedule change is more expensive than the lost/late deliveries. If your process is to schedule your product on a weekly basis, you may not want some last minute demand to mess up your weekly schedule. In this example, you can set your Firm Horizon to one week. In that case, you system knows that you have already firm up your schedule for one week, and would not put new suggestion in. 

So what happens when MRP detects new demand within the firm horizon? MRP does not remove the suggestion you need within the firm horizon. It will simply MOVE the start date to the first day outside of the firm horizon with a "Delay firm Horizon" message, and put the real demand date under the "MRP date column". It's a way of saying that "You really need this by this date, but I am delaying out to a later date due to the firm horizon."  It's then up to the planner to review these "delay firm horizon" suggestions and see if he can fit them in manually in the firm weekly schedule. 

Let me know if this helps. Thank you!