2011 Forecasting Performance Benchmark Study
Demand Planning during Promotions
Promotions accounted for approximately one quarter of annual volume in 2010. Contrary to conventional wisdom, promotional periods are actually forecast as accurately as non-promotional periods for the same items, with a weekly Demand Planning error of 46%. Perhaps this is due to the extra time spent by demand planners on these items. However, bias is seven times higher during promotions, rising from 2% to 13%.
Forecast error for items that are never promoted is considerably higher at 55%.
A Year of Promotions
Perhaps the real story is that promotional volume rose by 77% in response to the soft economy, from a total of 13% in 2009 to 23% in 2010. For items which are promoted at least once during the year, there were more sales during promotions in 2010 than in 2009, with the volume sold during promotions up by 80%.
