Demand Forecaster

Overview

The Demand Forecaster skill provides comprehensive capabilities for generating and managing demand forecasts. It supports multiple forecasting methods, accuracy measurement, bias correction, and integration of statistical and judgmental inputs.

Capabilities

• Time series forecasting (ARIMA, exponential smoothing)
• Causal modeling
• Machine learning forecasts
• Forecast accuracy metrics (MAPE, MAE, bias)
• Collaborative forecasting
• Demand sensing
• Seasonality adjustment
• New product forecasting

Used By Processes

• CAP-004: Demand Forecasting and Analysis
• CAP-003: Sales and Operations Planning
• CAP-001: Capacity Requirements Planning

Tools and Libraries

• Python statsmodels
• Prophet
• ML libraries (scikit-learn, TensorFlow)
• Demand planning systems

Usage

skill: demand-forecaster
inputs:
  historical_data:
    - period: "2025-01"
      demand: 10500
    - period: "2025-02"
      demand: 11200
    # ... additional history
  forecast_horizon: 12  # months
  method: "auto"  # auto | arima | exponential | ml | ensemble
  external_factors:
    - name: "gdp_growth"
      coefficient: 0.5
    - name: "marketing_spend"
      coefficient: 0.3
  adjustments:
    - period: "2026-06"
      type: "promotion"
      lift: 15  # percent
outputs:
  - point_forecast
  - confidence_intervals
  - accuracy_metrics
  - bias_analysis
  - seasonality_factors
  - recommendations

Forecasting Methods

Time Series Methods

| Method | Best For | Complexity | |--------|----------|------------| | Moving Average | Stable demand | Low | | Exponential Smoothing | Trends and seasonality | Medium | | ARIMA | Complex patterns | High | | Prophet | Multiple seasonalities | Medium |

Causal Methods

| Method | Use Case | |--------|----------| | Regression | Known drivers | | Econometric | Market factors | | Machine Learning | Complex relationships |

Accuracy Metrics

MAPE = (1/n) x Sum(|Actual - Forecast| / Actual) x 100

MAE = (1/n) x Sum(|Actual - Forecast|)

Bias = (1/n) x Sum(Forecast - Actual)

Accuracy Benchmarks

| MAPE | Interpretation | |------|----------------| | < 10% | Excellent | | 10-20% | Good | | 20-30% | Acceptable | | 30-50% | Poor | | > 50% | Very poor |

Forecast Value Added (FVA)

Compare accuracy at each step:

1. Naive forecast (prior period)
2. Statistical forecast
3. Analyst adjustments
4. Sales/customer input
5. Final consensus

Only keep adjustments that improve accuracy.

Integration Points

• ERP/demand planning systems
• CRM systems
• Point of sale data
• Economic data feeds