Calculation of historical forecast error for inventory optimization

In the recent SAP Integrated Business Planning 6.1 release, the inventory application has added a new and exciting innovation to provide a systematic approach for the calculation of forecast error. Forecast error is one of the key inputs into safety stock planning. We have introduced a new forecast error calculation operator.

Benefits:

• Enhancements to calculate and report the historical forecast error, which is input for inventory optimization in the calculation of safety stock
• Provision of a systematic way to calculate historical forecast error for all combinations of product, location, and customer groups with weekly granularity
• Features including special handling for intermittent items, forecast bias compensation, and outlier detection

Link to innovation: https://goo.gl/XMmUkk

Make sure that you expand the Product Features section and download the presentation titled “FORECAST ERROR” for fundamentals, details and screenshots.

The inventory applications sample planning area SAP3 has been updated to include the additional key figures and master data. If you have an existing planning area that is not copied from the SAP3 planning area in Release 6.1, please follow the steps in the above presentation.