Benchmarking Forecasting Software and Systems

BENCHMARKING FORECASTING SOFTWARE AND SYSTEMS By Chaman L. Jain, St. John’s University With the explosion in the number of forecasts to be prepared, forecaster needs more than ever a forecasting software package that not only does all the calculations quickly and accurately for a model to be used, but also, where necessary, prepares forecasts automatically. (Software with an expert system can prepare forecasts automatically. It first tests a number of forecasting models using the historical data, and then prepares a forecast for the next period with the model that, on the average, yields the lowest error.) How many forecasts have to be prepared depends on the number of products and SKUs a company has. It is not unusual for a company to have SKUs which run into thousands. The number further increases when forecasts are to be prepared by distribution centers, locations, channels, and customers. The globalization of markets has further added to the number of forecasts to be prepared. The need for a forecasting system is also growing. To understand it, one has to understand the difference between a forecasting software package and a forecasting system. A forecasting software package ...