Professional Documents
Culture Documents
A Practical Guide To MLR Forecasting in APO Demand Planning
A Practical Guide To MLR Forecasting in APO Demand Planning
A Practical Guide To MLR Forecasting in APO Demand Planning
Products
Products Industries
Industries Support
Support Training
Training Community
Community Developer
Developer Partner
Partner
About
About
Home / Community / Blogs + Actions
Radhakrishnan G K
more by this author
SAP Advanced Planning and Optimization | apo | book | calculations | data | debug | error | forecast
Follow RSS
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 1/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Author Bio
Please have a look at the SAP help link below which covers the formulas for
forecast errors.
http://help.sap.com/saphelp_46c/helpdata/en/a5/6320e843a211d18941000
0e829fbbd/frameset.htm
MAD: The mean absolute deviation gives the mean average difference
between the forecasted value and the historical value in the ex-post
forecast.
MPE: Is the mean percentage error between the forecasted value and the
historical value in the ex-post forecast.
MSE: Is the mean square error between the forecasted value and the
historical value in the ex-post forecast.
RMSE: Is the root mean square error between the forecasted value and the
historical value in the ex-post forecast.
MAD is used for low volume / sporadic demand pattern, whereas MAPE is
for high volume / fairly consistent and regular demand pattern.
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 2/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
MPE numbers may mislead planners as it considers the sign (+/- ). So the
error gets net off due to positive and negative numbers getting added up
resulting a smaller number.
Sample calculations
The below screen was taken on Oct 2012 .So we have history till Oct 2012
and Statistical forecast is calculated from Nov 2012
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 3/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
The function model takes N+1 as is shown in the debug screen later
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 4/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
=124.902126305067/ 13
=9.60785587
RMSE=SQRT(MSE)
=SQRT(84089.4615384615)
=289.981829669484 (Minor differences is due to rounding which are
explained later )
The functional module is taking N+1 as number of periods .In this example we
have ex-post forecast for 12 periods but all the error calculations are based on
13 periods
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 5/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
As shown in the above screen, the numbers are not rounded for greater
accuracy but the expost forecast seen in the planning book are rounded.
Alert Moderator
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 6/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
16 Comments
You must be Logged on to comment or reply to a post.
Former Member
Hi,
just to clarify for myself… this division by (n+1), is it ok? Or is it a bug that is
corrected by the OSS notes you quote at the end of your text? I am missing whether
you are documenting the bug or showing how the calculation works.
regards,
J.
The notes 1616763, 1746920 are other bug fixes in the calculations of
the error.
As we have too many settings in the univariate forecast tab and types of
forecast models ,settings and parameters so the results can vary and
may need further debugging of the code.
RK
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 7/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Former Member
J.
Former Member
Hi Borat
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 9/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
b) Calender week
Former Member
Borat
Hi Borat
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 10/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Steps:
Former Member
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 11/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Former Member
regards,
J.
Former Member
Ada Lv
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 12/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Former Member
If I change the Error Measure to be MAPE then the Automatic Selection selects the
Seasonal Model. The MAPE error is smaller than the MAD error.
Former Member
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 13/15
26.07.2018 Forecast error calculations in APO DP | SAP Blogs
Former Member
Thank you
Satish Waghmare
Christopher Smith
Great article guys, I keep referring to this time and again… thanks for the gift that
keeps giving.
Christopher Smith
https://blogs.sap.com/2013/04/02/forecast-error-calculations-in-apo-dp/ 15/15