Summary
This article reviews what is a benchmark forecast, why we calculate a benchmark forecast and how it is calculated.
Applies To
All Items in StockIQ has a benchmark forecast calculated irrespective of, if the forecast is "auto" or "manual".
Process
A Benchmark Forecast is a statistical forecast that is used to establish a baseline of acceptable performance for the statistical forecasting process. With a system like StockIQ, our goal is to always beat the benchmark forecast with our forecast algorithms.
In StockIQ, for a benchmark forecast, we use a simple 6-month rolling average. This is the basic forecast that we will put in place to establish "we should be able to do better than this."
If that is not the case, then very likely manual intervention is required, and we compare our Forecast Value Added (FVA) of the statistical model versus the benchmark in the Forecast Errors screen for this reason.