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ALL MY COURSES & METHODS
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FRENCH ENGLISH

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Edouard Thieuleux - Founder of AbcSupp
https://www.linkedin.com/in/edouardthie

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ux - Founder of AbcSupplyChain
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data, visual and examples

FORECAST ACCURACY
Quantity or value
Brand Item Forecast Demand Error Absolute error
Nike item 1 $100 $100 0 0
Nike item 2 $70 $100 -30 30
Nike item 3 $100 $0 100 100
Nike item 4 $30 $100 -70 70
Adidas item 5 $120 $100 20 20
Adidas item 6 $500 $450 50 50
Adidas item 7 $150 $100 50 50
Adidas item 8 $100 $120 -20 20
Adidas item 9 $50 $100 -50 50
Adidas item 10 $50 $80 -30 30
TOTAL $1,270 $1,250 20 420

Data
Brand Forecast Demand
Adidas 970 950
Nike 300 300
Total Result 1270 1250
 1-Error = Accuracy
Error² % Error % Accuracy %Error %Accuracy
0 0% 100% BIAIS 2%
900 30% 70% MAPE 39% 61%
10000 100% 0% MAE 34% 66%
4900 70% 30% MSE 2000% -1900%
400 20% 80% RMSE 40% 60%
2500 11% 89%
2500 50% 50%
400 17% 83%
2500 50% 50%
900 38% 63%
25000
Recommandation Explanations
Complementary
Not Recommended 1)
Recommended
Data science & 2)
Machine learning

3)

4)
5)
Explanations

Retrieve your forecasts by item and your sales over the desired period

Over which horizon? There are many ways to calculate your forecast accuracy. --> see matrix (not exhaustive)
The real question is: how much time separates the moment you made your forecast and the moment of your sales. 1 mon
months?
I recommend to use at least the average supply lead time. If your lead time is 2 months, compare your sales with your fore
made 2 months before.
If you have no idea what time frame to take, simply use the previous month. While this may seems to be too short to reac
still worthwhile as it is a simple way to take action in creating your KPI.

Absolute variance: calculate the absolute average variance between your sales and your forecast item by item. Whether y
50 more or less, the gap remains the same: 50
The absolute gap is fundamental when you calculate on several items because otherwise the gaps can cancel each other o

Calculation: 1 - (sum of absolute deviation per item / total sales)

The most important thing is to keep the same calculation method over the years to assess your progress.