Demand Forecast Accuracy
Category: Analytical
Measures the accuracy of demand forecasts compared to actual sales.
What it Measures ?
Shows how close actual demand was to forecasted demand.
Relevant StakeHolders
Demand Planner, SCM Analyst
Why it Matters ?
Improves forecast accuracy and planning.
In-depth Use Case / Real-world Example
A company manufacturing bicycles calculates Demand Forecast Accuracy by comparing the forecasted demand for bicycles with the actual sales figures. If the forecast predicted 1000 units and the actual sales were 950 units, the accuracy rate is 95%. This helps the company better align production with actual customer demand and reduce stockouts or overproduction.
Sample Formula
(Actual Demand - Forecasted Demand) / Forecasted Demand