PROC X12 returns the following error:

ERROR: Invalid Operation.

whenever the following two statements and sets of options are specified in the same PROC X12 step:

REGRESSION PREDEFINED=TD;
TRANSFORM FUNCTION=AUTO;

The FUNCTION=AUTO option on the TRANSFORM statement causes PROC X12 to test whether or not the data should be log-transformed or receive no transformation.

To circumvent the problem, either explicitly specify:

REGRESSION PREDEFINED=TD;
TRANSFORM FUNCTION=LOG;

whenever you suspect that a log transformation is needed, or omit the

REGRESSION PREDEFINED=TD;

statement when the TRANSFORM FUNCTION=AUTO; statement is required.