What Is Forecast Value Added (FVA)?

FVA is a metric for evaluating the performance of each step and each participant in the forecasting process to determine which one adds value and which one does not, so that the one that does not can be eliminated. For example, each forecast may have many touch points; some of them add value to the forecast and others make it worse. The objective of FVA analysis is to determine which touch points (activities) help and which don’t, so that one can eliminate those that don’t help. The override of one person may improve the forecast; while of others makes it worse. The metric-to-measure performance may be Mean Absolute Percent Error (MAPE), bias, or any other.