We show how to measure Mean Absolute Percentage Error (MAPE) and Weighted Mean Absolute Percentage Error (WMAPE). WMAPE is recommended for communicating overall effectiveness of your forecast process.
- Service-Level-Driven Planning for Service Parts B…Service-Level-Driven Service Parts Planning is a four-step process that extends beyond simplified forecasting and rule-of-thumb safety stocks. It provides service parts planners with data-driven, risk-adjusted decision support. […]
- Implementing Demand Planning and Inventory Optimiz…Data verification and validation are essential to the success of the implementation of software that performs statistical analysis of data, like Smart IP&O. This article describes the issue and serves as a practical guide to doing the job right, especially for the user of the new application. […]
- Do your statistical forecasts suffer from the wigg…What is the wiggle effect? It’s when your statistical forecast incorrectly predicts the ups and downs observed in your demand history when there really isn’t a pattern. It’s important to make sure your forecasts don’t wiggle unless there is a real pattern. Here is a transcript from a recent customer where this issue was discussed: […]
Pursuing best practices in demand planning, forecasting and inventory optimization
- Why Days of Supply Targets Don’t Work when Computi…Blog, Inventory OptimizationCFOs tell us they need to spend less on inventory without impacting sales. One way to do that is to move away from using targeted day of supply rules to determine reorder points and safety stock buffers. Here is how a target days of supply/coverage approach works: […]
- Supply Chain Math: Don’t Bring a Knife to a Gunfi…Blog, Excellence in Forecasting, Inventory Optimization, Operational AnalyticsMath and the supply chain go hand and hand. As supply chains grow, increasing complexity will drive companies to look for ways to manage large-scale decision-making. Math is a fact of life for anyone in inventory management and demand forecasting who is hoping to remain competitive in the modern world. Read our article to learn more. […]
- Managing Inventory amid Regime ChangeInventory OptimizationIf you hear the phrase “regime change” on the news, you immediately think of some fraught geopolitical event. Statisticians use the phrase differently, in a way that has high relevance for demand planning and inventory optimization. This blog is about “regime change” in the statistical sense, meaning a major change in the character of the demand for an inventory item. […]