Suppose for a particular week, the forecasted sales were $4,000. The actual sales were $3,000. What is the value of the mean absolute percentage error?
Question
Suppose for a particular week, the forecasted sales were 3,000.
What is the value of the mean absolute percentage error?
Solution
To calculate the Mean Absolute Percentage Error (MAPE), we first need to find the absolute error. The absolute error is the absolute value of the difference between the forecasted value and the actual value.
Step 1: Calculate the Absolute Error Absolute Error = |Forecasted Sales - Actual Sales| Absolute Error = |3,000| Absolute Error = $1,000
Step 2: Calculate the Percentage Error Percentage Error = (Absolute Error / Actual Sales) * 100 Percentage Error = (3,000) * 100 Percentage Error = 33.33%
So, the Mean Absolute Percentage Error (MAPE) for this particular week is 33.33%.
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