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Author's profile photo Venkadesh Seetharaman

Data Cleansing:Outlier Correction Methods in IBP-Demand

 

Outlier Detection Calculation with IQR Method:

Output generated with outlier value for Actuals Qty Adj KF

Scenario 2: Variance Method Detection and Correction with Tolerance

Input KF – Actual Quantity

Output KF – Actual Quantity Adjusted

Historical period: 11 weeks

Run Statistical Forecast with 11 week Historical Method

 

Conclusion

In this blog, I have explained only the Outlier correction method ‘correction with Tolerance’ and covered new Outlier correction methods for Trend and Seasonality Introduced in IBP-2011 Version. Other methods of Outlier Correction are all self-explanatory and hence I am not covering it as a part of this blog. So with this, I would like to conclude that any forecasting model if it needs to obtain a better accuracy it requires a defined pre-processing step which should cleanse the complete dataset.

Please post any of your queries in comment section.

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      Author's profile photo Mark Chockalingam
      Mark Chockalingam

      Good summary of the Outlier correction methods in IBP Demand.........

      However, these methods are based on a simple mean and use range-based measures around the central tendency to detect outliers.

      Since the detection is not based on thresholds (or Tolerance Lane as SAP has often called it) that are calculated with reference to the conditional mean, typically this will overcleanse the data.

      Although these methods sound fancy, caution is advised.......

       

      Author's profile photo Naresh Surepally
      Naresh Surepally

      Thanks for clear explanation.