1. What is Forecast Accuracy?

Definition: Forecast accuracy measures how close your predictions are to actual observed values.

Purpose: It helps businesses evaluate the effectiveness of their forecasting methods and improve future predictions.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Forecast — The predicted value
• Actual — The observed or real value

Explanation: The formula calculates the percentage difference between forecast and actual values, then subtracts from 1 to get accuracy.

3. Importance of Forecast Accuracy

Details: Accurate forecasting helps with inventory management, resource allocation, budgeting, and strategic planning.

4. Using the Calculator

Tips: Enter your forecasted value and the actual observed value. The actual value must be greater than 0.

5. Frequently Asked Questions (FAQ)

Q1: What does 100% accuracy mean?
A: 100% accuracy means your forecast perfectly matched the actual value.

Q2: Can accuracy be negative?
A: Yes, if your forecast is more than double the actual value, accuracy can be negative.

Q3: What's considered good accuracy?
A: This varies by industry, but generally 80-95% is considered good for most business forecasts.

Q4: How can I improve forecast accuracy?
A: Use better data, more sophisticated models, consider seasonality, and regularly update forecasts.

Q5: Are there other accuracy metrics?
A: Yes, alternatives include MAPE, RMSE, and WAPE, but this simple percentage method is widely used.