Talk:Calculating demand forecast accuracy

Untitled
This page should be deleted as measures of forecast accuracy, not limited to demand forecasting, are provided (in common notation) under Forecast - http://en.wikipedia.org/wiki/Forecast. Also, MAPE is not considered the primary demand forecasting error by statisticians and/or practitioners, MAE (MAD) is the primary measure, see Sanders, N. R. (1997). Measuring forecast accuracy: Some practical suggestions. Production and Inventory Management Journal, 38(1), 43-46 and Makridakis, S., Wheelwright, S. C., & Hyndman, R. J. (1998). Forecasting: Methods and applications (3rd ed.). New Jersey: John Wiley & Sons. Peter Catt 02:07, 15 December 2006 (UTC)

I agree that the content of this page is just a duplicate of the http://en.wikipedia.org/wiki/Forecast page. --Joannes Vermorel 14:37, 14 November 2007 (UTC)

I respectfully disagree. The forecast page is a primer on all kinds of forecasting, where as demand forecast accuracy page resolves confusions on calculating forecast error as used by the supply chain practitioners. I know this for a fact due to the many queries received from business practitioners across the world. Should the Wiki be just the home of the academic elite?? Markchockal (talk) 05:59, 27 November 2007 (UTC)

Since I originally contributed the content to this page a few years ago, I see this has gone through some harmful changes and misrepresentation of the actual facts. So I now actually agree with Vermorel that we should delete this page and let the academic description of forecast error stand as is. Markchockal (talk) 15:25, 30 April 2009 (UTC)

MAPE discussion
There has been considerable confusion on the issue of forecast accuracy. While academics use MAD and MAPE, there is little practical relevance the way MAPE is used by academics in the industry. The discussion on this page is perhaps one of a few on the web that brings to light the criticisms leveled against the use of MAPE as aruged by the academics.

While the industry practitioners have seen the rise of the discipline of demand planning, there is little recognition of this discipline among academic forecasters. The wiki should have a fair discussion of both the academic as well as the real world concepts. Markchockal 17:21, 14 March 2007 (UTC)

Shouldn't the formula for "deviation of the forecasted quantity from the Actual" be (forecast minus actual) over actual? I am not a mathematician, just a practitioner. My formula makes sense to me. The one on this page does not. For my purposes, anyway. —Preceding unsigned comment added by Dbrvnk (talk • contribs) 18:25, 14 February 2008 (UTC)

I see the discussion centering around lowering the error artificially. The denominator is a deflator for comparison purposes. To use the denominator that would deliberately show a lower error is perverse, in my opinion. What are you hiding and who are you hiding from? The denominator as an actual is better motivator for coming up with the true forecast. Otherwise it would lead to over-forecasting, building a double cushion against forecast errors - remember the user of the forecast is going to build a cushion anyway.

I am pretty tired of editing this page. This page now contains factual errors and probably does a disservice to the readers!! —Preceding unsigned comment added by 98.110.171.47 (talk) 17:18, 31 October 2009 (UTC)

When given the choice if dividing the error by either actual or forecast, should you divide by the forecast you are far better off to always over forecast by about 10%. This way, you are dividing by a larger number, resulting in a smaller error.

Personally I don't like this particular measurement, but if you have to use it, divide by actual.

A much better approach is to use standard deviation of forecast error. It doesn't create a nice number for business to understand, but it is clearly your goal to reduce this number.

It is just humorous to see the exchanges and imposition of opinions on Demand Planning Error constructed and used heavily by the manufacturing companies over the last thirty years. Standard deviation is a raw deviation from the mean -- the mean is just a plain vanilla estimator that can be outperformed by a number of other estimators. Forecast Error is with reference to a particular forecast, which was relied on by the users in the previous period to make decisions. Markchockal (talk) 18:48, 9 April 2009 (UTC)

Link to DemandPlanning.net
I moved the link to the above mentioned site from the Main body of the article to the external link. The site is a soft-sell commercial site, I do not dispute that some good info is to be found there, but linking from the main body of the site in not correct. Engti (talk) 09:04, 16 March 2009 (UTC)

Actually scrap that on further inspection DemandPlanning.net in their own words is

"Demand Planning, LLC provides specialized consulting and education in the areas of Demand Management, Sales & Operations Planning (S&OP), and Supply Chain Analytics. "

There is no way this should be linked from the site. I think it should be removed from the external link section too. But before that I would like somebody to pitch in with their opinion, especially somebody with greater knowledge of the rules governing wikipedia link inclusion policy. Engti (talk) 09:06, 16 March 2009 (UTC)

I have removed (once again) the links toward demandplanning.net. --Joannes Vermorel (talk) 14:28, 24 March 2009 (UTC)

People using the Wiki are perhaps not a profitable market for anything. I see there is activism in hiding the information that is available from the DemandPlanning.Net resource. The site is used by many planners and professionals and linking from the wiki only broadens the reach of this information. I have questioned if WIKI should be the exclusive home of academic elite that produce only esoteric stuff. This is stuff good for an evening discussion in a coffee shop, but rarely useful in creating things or producing value in the real world. I am reinstating (once again) the references. Markchockal (talk) 19:41, 9 April 2009 (UTC)

Markchockal, as you are directly involved in the business of Demand Planning LLC, I would ask you not to keep re-inserting commercial links. This website may offer valuable content, but I think it's better if it's neutral 3rd party people who handle the case. --Joannes Vermorel (talk) 20:49, 29 August 2009 (UTC)

I have removed the link to DemandPlanning.net. Wikipedia is not a yellow pages. Max Allen G (talk) 20:39, 4 February 2011 (UTC)

Yes. What is the Wiki - I am still trying to find out - White, Yellow or Green. I see a lot of activism here - hope some good comes of it. — Preceding unsigned comment added by Markchockal (talk • contribs) 01:28, 19 September 2015 (UTC)

Merger proposal with 'Forecast Error'
Measuring the forecast accuracy or the forecast error is the two sides of the same coin. The page Calculating demand forecast accuracy should probably be merged into Forecast error. The present page is a bit more focused on demand forecasts (a sub-category of forecasts), but considering the extend of demand-specific materials available here (about none), I see no reason to have a separate page.--Joannes Vermorel (talk) 15:17, 7 January 2012 (UTC)