Executive Summary A frequently asked question is what is a good or an acceptable forecast accuracy. Is there a real answer to this question? Introduction What is good forecast accuracy is a common question. Companies typically want to know if their forecast accuracy is where it should be. However, this question opens up another question…
Executive Summary sMAPE is one of the alternatives presented for limitations with MAPE forecast error measurement. sMAPE is generally low in effectiveness in providing feedback to improve the forecast. Introduction sMAPE, or Symmetrical Mean Absolute Percentage Error, is a significant but uncommon forecast error measurement. However, its complexity in calculation and difficulty in explanation make…
Executive Summary RMSE is a universally accepted forecast error measurement. RMSE is generally low in effectiveness in providing feedback to improve the forecast. Introduction RMSE, or Root Mean Square Error, is listed as one of the significant forecast error measurements. However, its complexity in calculation and difficulty in explanation make it a distant third to…
Executive Summary MAD is a universally accepted forecast error measurement. MAD is generally low in effectiveness in providing feedback to improve the forecast. Introduction MAD, or Mean Absolute Deviation, is one of the most common forecast error measurements in use. MAD is moderately easy to understand and relatively easy to calculate. However, when MAD is…
Executive Summary MAPE is a universally accepted forecast error measurement. MAPE is generally low in effectiveness in providing feedback to improve the forecast. Introduction (Skip if You Watched the Video) MAPE, or Mean Absolute Percentage Error, is a forecast error calculation method that removes negatives from the equation. It is easy to understand and easy…
Executive Summary The standard forecast error measurements are universally accepted, but they are not comparative. Comparative forecast error is rarely discussed. Introduction Forecast error is nearly universally reported without comparison. The forecast error is reported as a single number, which is the forecast using whatever is the current forecasting approach. In companies, people will often…
Executive Summary The standard forecast error measurements are universally accepted. What is rare is to ask the question of whether they direct companies to improve forecast accuracy. Video Introduction: Forecast Error Myth #4: Most Forecast Error Measurement Supports Identifying How to Improve Forecast Accuracy Text Introduction (Skip if You Watched the Video) Forecast error calculation…
Executive Summary Companies typically have Sales and Marketing departments that never have to worry about their forecast error is measured. We cover the problems that arise when Sales and Marketing have no forecast accountability. Video Introduction on Forecast Error Myth #3: Sales And Marketing Have their Forecast Error Measured Text Introduction (Skip if You Watched the…
Executive Summary Companies tend to think that weighing a forecast error and forecasting accuracy is unnecessary, and grouping is just fine. We cover the issues with relying on unweighted forecast error. Video Introduction: Forecast Error Myth #2: An Unweighted Forecast Error Measurement Makes Sense Text Introduction (Skip if You Watched the Video) Unweighted forecast errors…
Executive Summary Companies tend to think that forecasting applications manage their forecast error measurement. We cover the issues with relying on forecasting applications for forecast error. Video Introduction on Forecast Error Myth #1: One Can Rely on The Forecast Error Measurement in Forecasting Applications Text Introduction (Skip if You Watched the Video) Companies that purchase forecasting…