The need to make forecasts is commonplace in industry. The accuracy (and hence, usefulness) of forecasts varies from one sector to another, but is rarely high. Describes an approach to the monitoring of forecasts which aims to detect significant inaccuracy and to quantify the correction(s) that need to be made, based on well‐established methods of SPC, and so it also allows any changes in the pattern of demand to be detected, providing information for the revision of the forecasting model. Since the monitoring technique is based on statistical methods, it provides information which can be used directly in conventional models for inventory management. The user can choose the level of coverage required, and the monitoring technique indicates how well the target is being met. Again, any departure from the required level can be indicated at a stage early enough to take corrective action.
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