Demand Forecasting Best Practices

11 Measuring forecasting accuracy on a product portfolio

In chapters 9 and 10, we discussed multiple forecasting KPIs trying to assess the quality of a single product’s forecast (or a single time series). In practice, demand planners deal with hundreds, if not thousands, of products. Unfortunately, when computing a global accuracy metric for various products, you compare pears and apples because products are not all equally important (we will see in table 11.1 an example with nails, hammers, and anvils). Many companies understand this and look at accuracy by product categories rather than for all their products globally at once. Their implicit ...