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KNOWLEDGE LIBRARY

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12Jun

Unit Fill Rate (UFR)

The unit fill rate (UFR) for an item is the portion of the total number of units...

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...

26Jun

Inventory Activity Profiling & Data Mining

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

02Jun

Inventory Carrying Rate

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

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
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