The right way to measure forecast accuracy if you are interested in optimizing stock levels is to focus on the accuracy of the service level projection. Just because you set a service level target (or a system recommends a target) doesn’t mean you’ll actually achieve the target. This blog explains why and details how to calculate service level accuracy.
As a solution architect working for SAS in the field of Predictive Analytics I work with clients in many industries wanting to improve their forecast accuracy and hence their supply response, meaning improvements in forecast accuracy results in less inventory carrying cost and improved customer service.
The storyline is old. This blog is a new take on an old story.
The storyline was the central theme of the 1983 American comedy titled Trading Places starring Dan Aykroyd and Eddie Murphy. Remember it? It was one of my favorites: a funny movie where an upper class commodities broker and a homeless street hustler switch roles when they are unknowingly made part of an elaborate bet.