What is Forecast accuracy?
Forecast accuracy measures how close a forecast is to the demand that is later observed. It shows where models and planning assumptions need improvement. It should be evaluated by SKU segment and horizon, not only as one global average.
Formula
WAPE = sum |actual − forecast| ÷ sum actual
Practical example
A WAPE of 12 percent means total absolute forecast error equals twelve percent of actual demand.
What teams should remember
- Forecast accuracy measures how close a forecast is to the demand that is later observed.
- It shows where models and planning assumptions need improvement. It should be evaluated by SKU segment and horizon, not only as one global average.