Best Fit

The system recommends the best fit forecast by applying the selected forecasting methods to past sales order history and comparing the forecast simulation to the actual history. When you generate a best fit forecast, the system compares actual sales order histories to forecasts for a specific time period and computes how accurately each different forecasting method predicted sales. Then the system recommends the most accurate forecast as the best fit. This graphic illustrates best fit forecasts:

The system uses this sequence of steps to determine the best fit:

1. Use each specified method to simulate a forecast for the holdout period.

2. Compare actual sales to the simulated forecasts for the holdout period.

3. Calculate the POA or the MAD to determine which forecasting method most closely matches the past actual sales.

   The system uses either POA or MAD, based on the processing options that you select.

4. Recommend a best fit forecast by the POA that is closest to 100 percent (over or under) or the MAD that is closest to zero.