Girish Mahajan (Editor)

Calculating forecast attainment

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Calculating forecast attainment

Calculating forecast attainment periodically (monthly for example) provides visibility to the overall achievement of the plan and the total business bias. The time period of shipping activity should be compared against the forecast that was set for the time period a specific amount of days/months prior which is call Lag. Lag is based on the leadtime from order placement to order delivery. For example, if the leadtime of an order is 3 months, then the forecast snapshot should be Lag 3 months (Lag 3).

Contents

F o r e c a s t A t t a i n m e n t = ∑ ( T o t a l S h i p m e n t s F o r t h e T i m e P e r i o d ) ∑ ( T o t a l F o r e c a s t F o r t h e T i m e P e r i o d a s o f t h e L a g S n a p s h o t )

Usage

Used together with forecast accuracy and forecast bias to have a complete view of the impact of forecasting errors on operations.

  • Forecast Attainment is used to judge the overall achievement of the demand or supply plan and identify top level bias of the plan
  • Weighted Forecast Accuracy(WFA) or MAPE is used to measure the “health” of the product mix of the forecast
  • Forecast Bias is used to measure the Stock keeping unit (SKU) level tendency to constantly under or over forecast

    • Example Interpretations

    When used in a Sales and Operations Planning meeting the results of forecast attainment should be reviewed and appropriate action taken:

  • Consistent over attainment of forecasts could result in out of stocks or service problems if operations does not have the capacity or agility to respond to the over attainment.
  • Consistent under attainment of forecasts could potentially lead to excess and obsolete inventory. Business agility is needed to stop or slow down supply.

    • References

    Calculating forecast attainment Wikipedia
    (Text) CC BY-SA