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Forecast Accuracy

Forecast Accuracy

Forecast accuracy refers to the degree to which a forecast aligns with actual sales data, indicating how closely predicted values match real-world outcomes.

This metric is pivotal in demand planning and inventory management, guiding decisions to optimize inventory levels and prevent stockouts or overstocks. Forecast bias measures the consistent deviation of forecasts from actual sales, whether overestimating or underestimating. Key evaluation metrics for forecast accuracy include Mean Absolute Percentage Error (MAPE) and Mean Absolute Deviation (MAD), providing insights into the reliability and effectiveness of forecasting models.

Related Terms

Incremental Sales

Refers to the additional units of a product sold to retailers or consumers directly attributed to

Loyalty program

A initiative by a company to incentivize repeat purchases and customer loyalty by offering rewards, discounts,

Bulk Stacking

Optimal way to story inventory in a vertical manner when there is large quantities or excess