Demand Planning Help - POS Forecasting, Model Selection, Dummy Variables, Shipment Forecasting

  1. I work for a small company as a supply chain manager. I don’t have access to any software to assist me so what I do is graph each SKU out to look for seasonality. Talk to your sales team they will have an idea of when peak periods are. Then I come up with a theory to explain the data. Once I have my theory I run correlations and linear regression to establish significance. Once I find an indicator I use the value I get from the linear regression to build a formula. Then I historically test it. So I would go back in time and forecast based on my formula. If it’s somewhat accurate keep testing until it’s pretty solid. There are probably better ways of doing this, but I am about 90% accurate depending on the SKU. My historical data has tons of stock outs and confusing data points with no notes so I think I could get even higher if I had the right resources.

  2. How long have you been doing this? I’m new in the supply chain field and I have a degree in this yet a lot of this still confuses me. Pursuit of technical knowledge and improvement is my agenda for 2022 so I’m curious about your path.

  3. I understand why you are focused on choosing the best model but I worry your focus may be a little misdirected in what it takes to really stand out in your role. Everyone (particularly more senior roles) recognizes forecasts will be wrong. You can spend all day coming up with an amazing data science/AI model, but you need to know its going to be wrong and what being wrong costs the org. The more important questions I’d focus on are:

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