What is a better forecast actually worth?
Forecast accuracy sounds abstract, until you translate it into safety stock, holding costs and lost sales. This free calculator shows what even a modest improvement is worth for your inventory, in euros.
Conservative assumptions, documented below. No sign-up, nothing is stored.
What is a better forecast worth?
Even a modest improvement compounds. Slide to your own situation.
A 15% better forecast is worth roughly
€ 8.925 per year
Plus € 31.500 in working capital freed from safety stock.
About the calculation
How is the value calculated?
Three conservative assumptions: safety stock is roughly 30% of inventory value and scales with forecast error; holding inventory costs about 20% per year (capital, storage, risk, obsolescence); and lost sales from stockouts are around 4% of revenue, of which a better forecast recovers half × the improvement percentage. The outcome is deliberately cautious, not maximal.
Is a 15% forecast improvement realistic?
Yes, provided there is room between your current method and what your data allows. In benchmarks on sales data we regularly see 20-40% less error at week/SKU level versus a naive or average-based forecast; 15% is therefore a cautious starting point. The only way to know for sure is a benchmark on your own history.
Why does less forecast error free up working capital?
Safety stock exists to absorb forecast errors: the larger the error, the bigger the buffer needed to avoid lost sales. When the forecast gets more accurate, the buffer can shrink at the same service level, that capital is freed and the yearly holding costs on it disappear.
What is the next step if the number looks interesting?
A forecast benchmark on your own sales data, under NDA: we put our forecast next to your current method and a naive baseline, in black and white per product group. You'll know upfront which improvement percentage is realistic for you, measured, not promised.
Interesting number? Measure it on your own data.
Read how we measure forecast accuracy against a naive baseline, or start with a forecast benchmark on your own sales history, under NDA, results within weeks.
