Disaggregation methods to expedite product line forecasting

This paper addresses the issue of forecasting individual items within a product line; where each line includes several independent but closely related products. The purpose of the research was to reduce the overall forecasting burden by developing and assessing schemes of disaggregating forecasts of a total product line to the related individual items. Measures were developed to determine appropriate disaggregated methodologies and to compare the forecast accuracy of individual product forecasts versus disaggregated totals. Several of the procedures used were based upon extensions of the combination of forecast research and applied to disaggregations of total forecasts of product lines. The objective was to identify situations when it was advantageous to produce disaggregated forecasts, and if advantageous, which method of disaggregation to utilize. This involved identification of the general conceptual characteristics within a set of product line data that might cause a disaggregation method to produce relatively accurate forecasts. These conceptual characteristics provided guidelines for forecasters on how to select a disaggregation method and under what conditions a particular method is applicable.