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Demand Planning & Forecasting lesson

Forecast accuracy

For accuracy, the direction doesn't matter. Use the absolute error, so a miss of −5 counts as 5.

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About 5–10 minutes · no sign-up needed

The idea

For accuracy, the direction doesn't matter. Use the absolute error, so a miss of −5 counts as 5:

Key points

Absolute errorThe error without its sign. In Excel: ABS(forecast − actual).
Error %Total absolute error ÷ Total actual. Often called WMAPE.
Accuracy100% − Error %.

Bias shows the direction. Accuracy shows the size. Planners report both.

Practice

Try each one in your head first, then open the answer.

1. In D3, work out February's absolute error.
=ABS(B3-C3)
2. What's the forecast accuracy? Use 100% − (total absolute error ÷ total actual).
35 ÷ 435 = 8.0% error, so 100% − 8.0% = 92% accuracy
3. Tap the most accurate month.
February: off by only 5 units.

Learn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.

Try this lesson free →
About 5–10 minutes · no sign-up needed