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Supply Chain Management, SCM, SCRC Supply Chain Resource Cooperative, Poole College of Management, North Carolina State University

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SCRC Article Library: Forecast Error

Forecast Error

Published on: Jan, 19, 2011

The difference between actual demand and forecast demand, stated as an absolute value or as a percentage. E.g., average forecast error, forecast accuracy, mean absolute deviation, tracking signal. There are three ways to accommodate forecasting errors: One is to try to reduce the error through better forecasting. The second is to build more visibility and flexibility into the supply chain. And the third is to reduce the lead time over which forecasts are required.

Source: http://www.apics.org/ (10th ed.)

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