Search Results for: forecasting

  • What is Sales Forecasting?

    ByPrimary Researcher

    Executive Summary

    Sales forecasting is the signal given by individual salespeople to their management and that sales give to the rest of their company.
    We cover how sales forecasting works typically in companies and their pitfalls.

    Introduction
    Sales forecasting is the forecast created by salespeople and sales organizations. It seems cut and dried. However, it is close to impossible to find accurate information about how sales forecasts actually work.
    Our References for This Article
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    False Information Around the Sales Forecast …

  • How to Appreciate What is Statistical Forecasting?

    ByPrimary Researcher

    Executive Summary

    A statistical forecast is a distinct way of creating a forecast.
    We cover what it is and why they are called statistical.

    Introduction
    What statistical forecasting is a common question.
    They are the most commonly automated way of creating a forecast and are the baseline forecast in most cases. However, even most people who work in statistical forecasting do not know why they are called statistical.
    We cover this and why this mode of creating a statistical forecast is so important.
    What is Statistical Forecasting?
    Let us review some of the foundational statistical forecasting methods.

    A two or …

  • What is a Forecasting Method?

    ByPrimary Researcher

    Executive Summary

    Understanding a what is a forecasting method is critical to understanding statistical forecasting.
    We cover how to differentiate a forecasting method from a model.

    Introduction
    The question of what is a forecasting method is a relatively common question around forecasting. For this article, we will limit our topic of statistical forecasts.
    See our references for this article and related articles at this link.
    Most statistical forecasts, in developed countries at least, are generated by systems. Forecasting methods is the broader term that is used to describe the statistical approach that is used to produce the forecast.
    Let us …

  • Why is it Important to Understand Forecasting Error?

    ByPrimary Researcher

    Executive Summary

    Understanding and measuring forecast error is critical to improving forecast accuracy.
    Forecast error is far less well understood than most people know.

    Introduction
    It is vital to understand forecasting error as it provides the necessary feedback to improve forecast accuracy eventually. However, forecast error measurements are tricky, and in most companies, it tends to be assumed that the current forecast error measurement method must be “right.” However, forecast error measurement methods all have assumptions, strengths, and weaknesses. Furthermore, forecast error is often reported at aggregation levels above the product location combination. Again, other departments outside the supply chain …

  • Forecast Error Myth #1: One Can Rely on The Forecast Error Measurement in Forecasting Applications

    ByPrimary Researcher

    … Go to top
    Myth #1: The Myth of Effective Forecast Error Measurement in Forecasting Applications
    This is one of the major myths we have identified about forecast error measurement in the forecasting area. It is largely unquestioned, even though it can be easily disproven.
    The myth is so durable because of a misunderstanding of what forecasting systems do and how they are designed.
    For All of the Myths, See the Following Table
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    Forecasting Error Myths
    Select the link below to be taken to the appropriate forecast error myth.

    Myth Number Forecasting Error Myth Forecasting Error Myth Article

  • Why AI and ML Are So Overrated for Forecasting

    ByPrimary Researcher

    Executive Summary

    In 2019 we were deep into a giant AI bubble, and little published around AI is true.
    We cover the reasons that AI is so overrated.

    Video Introduction: Why AI and ML Are So Overrated for Forecasting
    https://youtu.be/8S10Gucpd5E
    Text Introduction (Skip if You Watched the Video)
    In this article, we will cover the primary reasons why the AI bubble is out of control and pop.
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    Problem #1: Lack of …

  • The Problem with POS Data for Supply Chain Forecasting

    ByPrimary Researcher

    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 use it as a primary strategy to, as they say, improve forecast accuracy.
    See our references for this article and related articles at this link.
    In this article, we will evaluate some logical issues with utilizing POS data for forecasting. This issue deals profoundly with …

  • The Problem with Machine Learning for Supply Chain Forecasting

    ByPrimary Researcher

    Executive Summary

    Machine Learning is a significant area of interest currently, and proponents of machine learning are proposing pulling investments from univariate statistical forecasting.
    There is a competition among vendors to make silly statements around machine learning.

    Introduction to Machine Learning
    The term machine learning has been popular for some time now. Machine learning is a term used by many as sort of a catchall for intelligent improvement…..but the vast majority of people who use the term (at the prompting of vendors and consultants) don’t know what the term means. In this article, we will investigate the term …

  • How to Understand What is an Outlier in Forecasting

    ByPrimary Researcher

    … either be overly high or overly low compared to the other data points in the time series.
    In this time series, the apparent outlier would be for period 7. Outliers are easy to identify either graphically or through calculation.
    What is an Outlier in Forecasting Software?
    Almost all supply chain forecasting applications have a way of setting the outlier detection.

    The outliner notification is usually set by the number of standard deviations away from the mean to say what is an outlier.
    Some forecasting applications auto-remove the outlier above the defined number of standard deviations.
    Other forecasting applications will …

  • How to Get Around The Problems with Forecasting in SAP ERP

    ByPrimary Researcher

    … do use SAP ERP’s forecasting functionality. This is true even though SAP ERP’s forecasting functionality is difficult to set up, is located in a strange place in SAP ERP’s pathway, difficult to audit, and it also does not have a user interface that those who work in forecasting have come to expect from a forecasting system. The functionality is only designed to generate statistical forecasts. This means that one has to combine the forecasting functionality in SAP ERP with some external forecasting manipulation and viewing. You will learn how to set up forecasting using this functionality in …