Forecast Pro TRAC provides a wide array of exception reports, including reports which monitor your archived forecasts (i.e., previously created and saved forecasts) and reports which monitor your current forecasts (i.e., the forecasts you are working on but haven’t yet finalized). Exception reports enable you to quickly find cases where your forecast error or some other performance metric has fallen outside of an acceptable range. In this article we explain in detail how to create the Waterfall Exception Report to monitor forecast accuracy.
Monitoring Archived Forecasts
When you save a forecast project, Forecast Pro TRAC stores both the statistical forecasts and the final (i.e., potentially adjusted) forecasts in the project’s database. If you have been updating your project and forecasts every planning period (for example, every month), this means that in addition to the current month’s forecast your project’s database will contain forecasts that were generated in previous months. This record of previously generated forecasts is referred to as the forecast archive.
The screenshot below shows one of the primary accuracy tracking reports available in Forecast Pro TRAC. Due to its cascading-like appearance, this style report is often referred to as a waterfall report. The report compares what we forecasted to what actually happened, therefore it is based on two key elements—actual demand history and archived forecasts for the periods being analyzed.
The green row across the top of the report displays the actuals for the periods January 2012 through June 2012. The blue diagonal in the report highlights a set of six one-month-ahead forecasts made starting with the forecast origin date December 2011 and ending with the forecast origin date May 2012. The highlighted blue column in the bottom left of the report displays summary statistics, including the MAPE for the full set of six one-month-ahead forecasts. The MAPE in this example is 5.86%.
The Waterfall Exception Report
When you choose the View tracking report icon in Forecast Pro TRAC you have the ability to generate and view a waterfall report for every forecast you have created, including the lowest-level forecasts and all aggregate forecasts. While it may be desirable to review the waterfall reports for all of your forecasts, it may be impractical to do so manually. This is where exception reporting plays a key role. The Waterfall Exception Report in Forecast Pro TRAC lets you create an exception report which generates a list identifying only those waterfall reports that need manual review.
Clicking the exception report icon or selecting View>Exceptions Report from the menu opens the Forecast Exceptions Report window and displays the selected exception report.
In Forecast Pro TRAC there are six available exception report types, including the waterfall exception report. Clicking the right mouse button in the Forecast Exceptions Report window brings up the window’s context menu. Choosing Exception Report Settings… from the context menu brings up the Exception Report Settings dialog box shown below.
The Waterfall tab contains the settings for the waterfall exception report. In the Waterfall exception settings tab shown above, the currently chosen options specify that: 1) The lead time (forecast horizon) to be monitored is “1.” This means that the set of one-month-ahead forecasts will be monitored (in the report shown above this is the set of forecasts highlighted in the blue diagonal and summarized in the blue column), 2) The performance measure used for exception monitoring will be the MAPE, and 3) The exception threshold is 25%. Based on the above three settings, any forecasts where the one-month ahead MAPE exceeds 25% will be identified as exceptions and therefore listed on the waterfall exception report. Clicking OK runs the exception report.
The screenshot above shows the resulting exception report directly above the waterfall report. The exception report lists all forecasts where the one-month-ahead MAPE exceeds 25%. In addition, the identified exceptions are ordered so that the forecast with the greatest deviation is listed first, followed in descending order by the others. Double-clicking directly on any line on the report brings immediately selects the item on the Navigator and updates all open reports, making it extremely easy to review all of the reported exceptions.
In the next Forecast Pro Tips & Tricks post, we will focus on Forecast vs. History reports.
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