What This Article Covers
- Forecastability Score
- Why Determining Forecastability is Important
Companies struggle with segmenting their database in a way that allows them to allocate their planning labor effectively. They also often don’t know, or have a mathematical measurement for how forecastable their dataset is. The concept of forecastability is how inherently a dataset is with statistical methods. Many people think that more difficult to forecast datasets are helped with more advanced forecasting methods, when in fact the opposite is the case. Furthermore, the forecastability is getting worse for most companies as marketing is continually adding new products to the database that a company has to carry and therefore forecast.
We have developed a forecastability score. Each product location is declared either forecastable or not forecastable. And then the overall database is given a forecastability score base upon combining the individual product location combinations.