Question

If one time-series model is used for forecasting a low demand item and another time-series model is used for forecasting a high demand item, which measure of forecast accuracy provides a valid comparison of the errors from these two time-series?

Answer 1

MAPE forecast accuracy

Step-by-step explanation:

Mean absolute percentage error (MAPE) is used to measure the accuracy of forecast systems. The formula for determining MAPE is:

MAPE = [(actual values - forecast values) / actual values] x 100

MAPE is measured as a percentage, and generally a MAPE which is less than 10% is considered very good.

If forecast systems aren't accurate enough, they are useless.