What is gamma in SAP SRD-SCM-DP - SCM-Demand Planning?

SAP Term: gamma

• Component: SRD-SCM-DP

• Component Name: SCM-Demand Planning

• Description: A smoothing factor used by the seasonal trend method of forecasting. A gamma value is used as a smoothing factor for the season indices.

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• Key Concepts: 
  Gamma is a statistical measure used in SAP Demand Planning to measure the accuracy of a forecast. It is calculated by dividing the sum of the absolute differences between the actual and forecasted values by the sum of the actual values. A higher gamma value indicates a more accurate forecast. 
  
  How to use it: 
  Gamma can be used to measure the accuracy of a forecast in SAP Demand Planning. To calculate gamma, divide the sum of the absolute differences between the actual and forecasted values by the sum of the actual values. This will give you a gamma value that can be used to compare different forecasts and determine which one is more accurate. 
  
  Tips & Tricks: 
  When using gamma to measure forecast accuracy, it is important to remember that a higher gamma value does not necessarily mean that the forecast is more accurate. It simply means that there is less difference between the actual and forecasted values. Therefore, it is important to consider other factors such as seasonality and trend when evaluating forecasts. 
  
  Related Information: 
  For more information on gamma and other measures of forecast accuracy, please refer to SAP's documentation on Demand Planning. Additionally, there are many online resources available that provide further information on forecasting techniques and measures of accuracy.