Demand Forecasting Best Practices

9 Choosing the best forecasting KPI

In chapter 8, you learned how to compute various forecasting KPIs (Bias, MAE, MAPE, and RMSE—see table 9.1 for a recap). Unfortunately, as highlighted in the case study in section 9.4, depending on the KPI you pick, you might end up choosing different forecasts. (Remember, the objective of demand forecasting is to provide valuable information to the other teams in the supply chain so they can make appropriate decisions.)

Table 9.1 Forecasting Metrics

Metric	Formula
Bias		=average(error) ...