Using Coefficient of Variation to Drive Safety Stock Related Decisions

In a previous blog post, we discussed how a high or low value of Coefficient of Variation (CV) impacts the first or second term of safety stock. Today we decided to put this to the test using real customer data - here we will discuss our findings.

[Simulation Results] How Does a Change in Demand From a One-Time Event Impact Future Forecast?

Last week I wrote about the potential benefits in forecasting results based on removing outliers from one-time events. A key question that came up because of that post was this: How long does a change in demand as a result of an event (whether up or down) impact forecasts in the future? Rather than theorize

By |2019-04-13T23:09:39-04:00December 21st, 2016|Demand Planning, Forecasting|

Illusively Complex – Effective Approach to Mixing Judgment and Statistics in Forecasting

In 1994, the IBM Micro-electronics Division, itself a fortune 100 size firm, put in place a major effort to create best in class supply chain planning process and software including demand planning(DM), central planning, available to promise, et al. I was fortunate to be an original member and had the opportunity to work extensively on

By |2024-02-21T14:20:42-05:00October 13th, 2015|Demand Planning|

Using Coefficient of Variation as a Guide for Safety Stocks

In one of my previous posts, I wrote about using coefficient of variation (CV) as a predictor of forecastability. In this post, I will talk about how it can be used to indicate a sensitivity of lead time towards the safety stock calculations. To quickly remind the reader first: The formula for CV = StdDev

5 Steps to a Better Statistical Forecast

Developing an accurate as possible forecast is very important in running a business. Demand planners spend countless hours trying to create a better forecast so that they can help their company be more efficient. A key ingredient in the creation of the final forecast is the forecast generated by a computer program, which is based in statistics. In this

By |2024-02-21T14:22:52-05:00February 6th, 2015|Demand Planning, Forecasting|

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