Measuring Forecast Accuracy in a Pharmacy

Read this article where forecasting approaches, along with a hybrid forecasting method are covered. What types of data can a company use in quantitative forecasts?

Abstract

This study examines the application of structured forecasting methods to determine accurate demand forecasts using 12 monthly sales figures of a moderate busy pharmacy. The date were analysed using some forecasting techniques; Moving Average Method, Exponential Smoothing Method and Least Square Method. Also, the performances of the forecasting methods were evaluated using some accuracy measures such as Mean Absolute Deviation (MAD), Mean Square Error (MSE) and Mean Absolute Percentage Error (MAPE) to. The findings reveal that exponential smoothing method which results to least forecast error is the best method. Hence, the pharmacy is advised to adopt this best forecasting method to determine its monthly demand forecasts. Pharmacy operators should maintain sound sales and inventory records; it is easier if the system can be computerized but it could be expensive to operate for small pharmacy outlet.

Keywords: Forecasting methods; pharmacy; performance; demand forecast and accuracy measures

Source: John Kolade Obamiro, http://journals.univ-danubius.ro/index.php/oeconomica/article/view/5779
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