BUSINESS ADMINISTRATION
BUSINESS ANALYTICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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overestimated
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underestimated
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accurately estimated
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closely approximated
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Detailed explanation-1: -A negative value of forecast error signifies that the model has overestimated the actual value of the period.
Detailed explanation-2: -BIAS or Mean forecast error: It measures the forecast error with regard to direction and shows any tendency of overcast or undercast.
Detailed explanation-3: -Mean absolute deviation (MAD) is another commonly used forecasting metric. This metric shows how large an error, on average, you have in your forecast. However, as the MAD metric gives you the average error in units, it is not very useful for comparisons.
Detailed explanation-4: -At its most basic, forecast error is the difference between the forecast demand and the actual demand. A lot of calculations go into forecast error, but the bottom line is that the greater the difference between actual demand and forecast demand, the greater the impact on a distributor’s bottom line.