| autocorrelation (SCM-APO-FCS) |
Autocorrelation occurs when the error terms of a regression model are not independent; that is, when the values of historical periods in the forecast model are influencing the values of current periods. Time series with a strong seasonal or cyclical pattern are often highly correlated.
Autocorrelation is undesirable because it can falsify the demand forecast. If you detect more than an acceptable level of autocorrelation, it means that you need to improve your MLR model. Durbin-h and Durbin-Watson are measures of autocorrelation.