5 Forecasting hierarchies
I have seen countless companies forecasting demand at irrelevant aggregation levels (material, geographical, or temporal) that do not match the information granularity required to make supply chain decisions. Many supply chains—especially manufacturers—typically rely on populating 18-month forecasts per country by monthly buckets. Should this be considered a best practice, or is it merely a by-default, overlooked choice?
In this chapter,10 we will discuss forecasting hierarchies in detail. You will learn to assess your demand planning process’s relevant material, geographical, and temporal aggregation levels (or dimensions). ...
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