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Key assumptions in calculating the Cost of Forecast Error. A commentary on Peter Catt’s article, assessing the Cost of Forecast Error, in Issue 7 of Foresight

Research output: Contribution to journalJournal articlepeer-review

Published
<mark>Journal publication date</mark>2007
<mark>Journal</mark>Foresight: The International Journal of Applied Forecasting
Volume8
Number of pages3
Pages (from-to)22-24
Publication StatusPublished
<mark>Original language</mark>English

Abstract

John’s key points are these. • Organizations should consider which service level measure aligns most closely to their corporate objectives. Cost of Forecast Error (CFE) calculations should be based on this measure. • Assessment of service level targets at higher levels of aggregation elevates an operational task to a strategic issue and facilitates consideration of external factors. • Alternative approaches which do not depend on Cost of Forecast Error estimates, such as tradeoff curves, should be considered. Copyright International Institute of Forecasters, 2007