Demand Planning
- 18 May 2022
- 1 Minute to read
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Demand Planning
- Updated on 18 May 2022
- 1 Minute to read
- Contributors
- Print
- DarkLight
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The Demand Planning module helps analyze sales forecast performance. You can discover how to improve your demand planning process with targeted actions.
The following metrics are aimed at evaluating demand planing and can be obtained from Owl platform.
| Metric | Definition | Calculation |
|---|---|---|
| Forecast Error | It measure the difference between forecast sales and actual sales. It allows sales department to know if they are on target to meet their goals. The frequency to calculate this will depend on the company needs or business cycles. | FE = Actual sales - Forecast sales |
| Forecast Accuracy | It indicates how accurate the predictions have been. It ranges from 0 to 100%. A good number for this will depending on factors, like product and business scenario. For example, if is a product with no sales history, accuracy of 80% is good, if not the target should be 90% or better. | FE=(1- (ABS (Forecast Sales -Actual Sales) ) / Actual Sales * 100 |
| Bias | This metric is also known as mean forecast error (MFE). It is the tendency of forecasts to persist in one direction. It's a good way to check if the forecasting model is working. Track bias is important to corrected before forecasts skews for too long either higher or lower than actual sales. | Bias = (Forecast Sales -Actual Sales) / Actual Sales * 100 |
| MTD Accuracy | This metric is the forecast accuracy applied monthly in a period under analysis. This should be more accurate than companywide forecast since the information is more precise. | MTD FE = (1- (ABS (Actual sales for month - Forecast sales for month period )) / (Actual sales for month) * 100 |
| MTD Bias | This metric is the forecast accuracy applied monthly in a period under analysis. This should be more accurate than companywide forecast since the information is more precise. | MTD FE = (1- (ABS (Actual sales for month - Forecast sales for month period )) / (Actual sales for month) * 100 |
