Final answer:
Postponement can both increase and reduce forecast accuracy depending on whether it affects base product levels or finished goods. It can lead to more stable forecasts for base units but might decrease accuracy for final product variants if it results in longer lead times.
Step-by-step explanation:
Postponement generally refers to the delay in product differentiation or final assembly of a product until the latest possible time. This strategy can influence forecast accuracy in various ways. In a typical supply chain, postponement can affect forecasts because it delays the point of differentiation and can reduce the risk of overproduction and underproduction for certain product variants. However, depending on the context, postponement can both increase and reduce the accuracy of forecasts. For instance, postponement may increase forecast accuracy for base product levels since producing base units (prior to differentiation) often involves more stable and predictable demand patterns. On the other hand, if the delay causes insufficient lead time to respond to customer orders or market changes, this might reduce forecast accuracy at the variant level. To sum up, postponement can potentially improve forecast accuracy for the undifferentiated parts of the inventory, but it might decrease accuracy for finished goods if it leads to longer lead times and less agility in responding to specific market demands.