Forecast Basics

Executive Summary Removing forecast bias is a politically complicated endeavor. We cover how to do it. Introduction Forecast bias is distinct from forecast error and is one of the most important keys to improving forecast accuracy. To understand what it is, see the article How to Understand Forecast Bias. In this article, we will address…

Executive Summary A big part of DDMRP is its proponents stating that critics don’t understand DDMRP. In this article, we analyze what a DDMRP proponent has to say about forecasting. Introduction The following article, Forecasts, one of DDMRP’s best friends, was shared on LinkedIn and was written by David Villalobos on July 16, 2020. See…

Executive Summary Calculating a statistical forecast is far more straightforward to create than is often thought in practice. We cover the calculation of the forecast and what it means. Introduction How do you calculate a forecast is a common question that we receive. Because statistical forecasts, in developed countries at least, are generated by systems,…

Executive Summary POS information is often proposed to be used to improve forecast accuracy. The evidence does not support that using POS does what vendors and consultants say it does. Introduction to Using POS Data for Forecasting Using POS data is a frequently proposed way to improve forecast accuracy. Software vendors that do demand sensing…

Executive Summary Outliers are easily identified in applications, but the question is how to deal with them. The questions to ask regarding when outliers should be removed. Introduction The question of what an outlier is and what outlier removal is always a topic of keen interest in forecasting projects, which is why having a specific…

Executive Summary History shows some interesting insights as to complex methods. There are frequent misunderstandings regarding forecastability, which leads to the misuse of naive methods. Introduction to Complex Forecasting Methods Selecting the right forecasting methods is a critical component of forecasting. You will learn why sophisticated forecasting methods tend to be overestimated and how to…

Executive Summary Sales forecasting is little covered in books. It is necessary to understand the limitations of low volume sales forecasting. Sales forecasting output can be used for supply chain forecasting. However, it must be checked and frequently adjusted for sales or quota bias. Introduction to Low Volume/High Dollar Forecasting In performing research into forecasting,…

Executive Summary Forecasting is typically performed at the finished good, but it can be performed at the assembly. To do so means understanding assembly to order planning and forecasting and knowing when assemble to order forecasting is appropriate. We cover where assemble to order planning is configured in SAP APO. Introduction to Assemble to Order…

Executive Summary Forecasting at the customer is a commonly requested item by companies. However, there are problematic issues with doing this. Forecasting at the customer is something that leverages a customer forecast hierarchy. Introduction As stated, an attribute can be any categorization that one wants to associate with a product. An attribute can also be…