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How does forecast accuracy correlate with stockouts?
Let me not give you the answer. Just close your eyes and let your intuition guide you how the correlation should be. Do you expect it to be high or low?
Now is the time to check it out for yourself. Take any period that you think is representative of current times, for which you have reliable data on forecast accuracy as well as stockouts. Segment the data either product wise or geography wise so that you have about 30-40 data points of forecast accuracy and corresponding stockouts. Plot it in a simple x-y graph with forecast accuracy on one axis and stockouts on the other.
What does the graph tell you? If you think the two are highly correlated, the graph should show a straight line with negative slope. On the other hand, if these two measures are not correlated, the plot would look like a scatter diagram of random distribution.
What did your graph reveal? Did it surprise you?
Would love to hear from you… Please share the graph if you wish.