More accurate forecasting system

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Reference no: EM133631340

A multinational corporation has recently implemented a new and more accurate forecasting system. Indeed, the mean absolute percentage error has decreased from 18% to 14%. Upon reviewing the latest reports, the COO notices that the reorder points for most products have increased since the implementation of the new forecasting system. The COO is confused since they expected reorder points to decrease rather than increase (it is important to note that the way the firm determines reorder points has not changed). Please draw on your knowledge of forecasting and/or inventory control theory to offer the most likely explanation for this observation. Please refrain from speculating or making unnecessary assumptions.

Reference no: EM133631340

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