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Forecasting
Forecast accuracy
How close forecasts have been to actuals, measured consistently — mean absolute percentage error is the usual — so the forecast process itself can improve.
Owned by: Senior analystTest band: Senior analyst
The formula
MAPE = average of |Actual − Forecast| ÷ Actual
In practice
Track bias too: a forecast that is always 5% high has a fixable problem. One that is randomly wrong has a different one.
The kind of thing the test asks
- The revenue forecast has been 6–8% too high for nine straight months. The problem is…
- The best way to improve forecast accuracy over a year is…
More in forecasting
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