We have all been taught the safety stock formula. It is however, not very responsive to use average sales and historical sales to calculate the sigma value. This is because the sales changes with time, and we are all unsure of the period of historical sales to average it over. Additionally, new product launches, promotions and variants all affect actual sales numbers.
Since the sigma value for safety stock is a measure of the difference between projected vs actual sales, it makes a lot of sense that sigma be derived from forecast vs actual sales. This is a more responsive and forward looking approach as forecast incorporates up-to-date factors like sales, promotions or events. Plus, we are using the actual sales rather than average sales to derive the sigma for safety stock. This has significant implication for re-order point calculation subsequently.
What's more, measuring forecast and actual sales also facilitates Sales & Operations Planning in an organization.