Using Relative Error Metrics to Improve Forecast Quality in the Supply Chain

How can we identify our best opportunities to improve forecast accuracy? Steve Morlidge concludes his four-part Foresight series on forecast quality by offering an approach based on (a) product volumes and variability, and (b) a forecastability metric that assesses forecast accuracy in relation to the accuracy of a na•ve (i.e., no change) forecast. The metric helps supply-chain forecasters set meaningful targets for improvement, quantifies the scope for improvement, and tracks progress toward final goals. Copyright International Institute of Forecasters, 2014