Forecast accuracy refers to the degree to which a forecast aligns with actual sales data, indicating how closely predicted values match real-world outcomes.
This metric is pivotal in demand planning and inventory management, guiding decisions to optimize inventory levels and prevent stockouts or overstocks. Forecast bias measures the consistent deviation of forecasts from actual sales, whether overestimating or underestimating. Key evaluation metrics for forecast accuracy include Mean Absolute Percentage Error (MAPE) and Mean Absolute Deviation (MAD), providing insights into the reliability and effectiveness of forecasting models.
