Join us in Chicago for our Demand Planning & Sales Forecasting workshop on Oct 11-12, 2017.
Forecast Alerts

Alerts are important. But more important is an understanding of the business to set reasonable thresholds and the mathematical common sense to use relative measures for alerting.

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Tracking Signal

  Tracking signal is a measure used to evalue if the actual demand does not reflect the assumptions in the forecast about the level and perhaps trend in the demand profile. In Statistical Process Control, people study when a process is going out of control and needs intervention. Similarly Tracking signal tries to flag if […]

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Inventory Optimization vs. Days on hand

Why is it important to learn new techniques than banking on century old DOH measure? The Days of Supply is a thumb rule calculation used to manage inventory during the era of green accounting spreadsheets. It has many challenges including the demand fluctuations which can affect the metric. The forecast is uncertain and has an […]

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Model Diagnostic – R squared or MAPE?

We have now settled that MAPE or Mean Absolute Percent Error is the measure for forecast performance for a planner/Division at the end of the month.  It is more popularly used as a cross-sectional measure across multiple items and products to come up with one metric to denote forecast performance. However, what should we use […]

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Is MAPE controversial?

MAPE = Mean Absolute Percent Error.  This is the common error measure used by the Supply Chain profession.  Demand Planners and Demand Forecasters spread across the manufacturing sector use MAPE to measure the performance of their demand forecasts.  This is used cross-sectionally across several items or SKUs for the previous month using a forecast that […]

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The mystery of Moving Averages

A user in an APO forum lamented: “I am trying to use the Moving Average option in APO DP but I get a static forecast that remains constant for all the future months based on the history.  I would like the statistical forecast to be a moving target not a constant.  Not sure how to achieve this?!” “All I […]

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Hello Demand Planners!

Welcome to the forecasting blog!  These are collection of thoughts on forecasting, demand planning, Sales and Operations planning and corporate strategy!  Please contribute your thoughts and comments to enhance the usefulness of business forecasting around the world!

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