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Demand Planning & Forecasting lesson

Forecast bias

Bias is the total error compared with what actually sold. Positive means the forecast was too high.

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About 5–10 minutes · no sign-up needed

The idea

Bias is the total error compared with what actually sold. Positive means the forecast was too high:

Formulas

( Forecast − Actual ) ÷ Actual

Key points

ErrorForecast − Actual, for each period.
Bias %Total error ÷ Total actual × 100.
What it meansPositive bias builds excess stock. Negative bias causes stockouts.

Bias tells you which way the forecast leans, so you can correct it.

Practice

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

1. Row 6 has the totals. In D6, work out the bias: (total forecast − total actual) ÷ total actual, as a decimal.
=(B6-C6)/C6
2. Tap the month where the forecast was too low.
February: 120 forecast, 125 sold.
3. The bias is +5.7%. What will happen if nobody corrects it?
Stock will keep building up beyond what sells

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