## KNOWLEDGE LIBRARY

27Jun

#### Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

#### Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

#### Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

#### Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

#### Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

## Forecast Accuracy

The most popular measures of forecast accuracy are the algebraic deviation and percentage, the absolute deviation mean and percentage, and the standard deviation of forecast errors.

The measures related to the algebraic are as follows:

• Algebraic Deviation = Forecast Demand – Actual Demand
• Algebraic Deviation Percentage = Algebraic Deviation /Actual Demand

The measures related to the absolute deviation are as follows:

• Absolute Deviation = |Forecast Demand – Actual Demand|
• Absolute Deviation Percentage = Absolute Deviation /Actual Demand
• Mean Absolute Deviation (MAD) =
Sum of Absolute Deviations over N Periods/N
• Mean Abolute Deviation Percentage =
Sum of Absolute Deviation Percentages over N Periods/N