Glossary
Forecast accuracy
How close forecasts are to what actually happens.
Technical definition
A measure of forecast error, often reported as 1 − MAPE (mean absolute percentage error).
Formula
Accuracy = 1 − (Σ|actual − forecast| ÷ Σ actual)
Manufacturing example
A forecast off by 10% on average has roughly 90% accuracy.
Common misconception
Accuracy alone is incomplete; a forecast can be accurate on average yet consistently biased.
Why it matters operationally
Better accuracy reduces both stockouts and excess inventory.
Related terms
Put forecast accuracy to work
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