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KNOWLEDGE LIBRARY

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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
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