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Understanding and predicting customer demand is vital to manufacturers and distributors to avoid stock-outs and maintain adequate inventory levels. While forecasts are never perfect, they are necessary to prepare for actual demand. In order to maintain an optimized inventory and effective supply chain, accurate demand forecasts are imperative.
==Calculating the accuracy of supply chain forecasts==asdfghjkl;'
Forecast accuracy in the supply chain is typically measured using the [[Mean absolute percentage error|Mean Absolute Percent Error]] or MAPE. Statistically [[Mean absolute percentage error|MAPE]] is defined as the average of percentage errors. Most practitioners, however, define and use the MAPE as the Mean Absolute Deviation divided by Average Sales. This is in effect a volume weighted MAPE. This is also referred to as the MAD/Mean ratio.
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