Fundamentals

Forecast horizon

The forecast horizon is how far into the future the model is asked to fill in. A 14-day horizon is fourteen daily ticks (or two weeks). It should match the decision's lead time, not a default in a library.

Replenishment that ships overnight does not need a 16-week path. A container on the water does. Using one horizon for both jobs produces a chart that is precise about the wrong week.

Error grows as the horizon grows. Each step rests on the last. By month ten you are often forecasting a forecast. Use long horizons for direction, short ones for the PO.

The horizon is part of the contract with the consumer of the number. Change it and you changed the product, even if the model file has the same name.