Forecast Value Added (FVA)

Updated September 2026Finance Software Glossary

Forecast value added (FVA) is a metric that measures whether each step in a forecasting process improves accuracy compared with a naive baseline, such as assuming last period's demand repeats. If a planner's manual overrides produce worse accuracy than the statistical forecast, their FVA is negative. Companies use FVA to remove steps that add work but no value.

A demand forecast typically passes through several hands: a statistical baseline, planner overrides, sales input and a consensus meeting. FVA scores each step against the step before it and against a naive forecast. Practitioner studies have repeatedly found that some of these touches make the forecast worse.

The method is simple. Compare the accuracy of each process step, using MAPE or another metric, then cut or fix the steps with negative value added. It's one of the cheapest ways to improve forecast accuracy because it removes work instead of adding it.

In software: demand planning platforms such as o9, Logility and Blue Yonder can track FVA by keeping every forecast version, from statistical baseline to final consensus, and scoring each layer against actuals.