Glossary

Forecast Accuracy

Tags: Glossary

A measurement of the level of accuracy inherent in your forecast as a percent of actual units or dollars shipped. Forecast accuracy in the supply chain is typically measured using the Mean Absolute Percent Error (MAPE). However, there are confusions between the statistical definition of MAPE and its application among supply chain planners. Statistically MAPE is defined as the average of percentage errors. Most practitioners however define and use the MAPE as the Mean Absolute Deviation divided by Average Sales. You can think ofthis as a volume- weighted MAPE. In some references, this is also referred to as the mean absolute difference (MAD)/mean ratio.