So far we have studied several forecasting algorithms. Most of these can have many different variants, depending on whether seasonality, trend, and so forth are included or not. The question therefore arises how to decide whether one algorithm does a better job at forecasting a given time series than another one—that is, we need to benchmark methods and find those that work the best in our context. We thus need forecast quality key performance indices (KPIs), or error measures.
Performance measurement is necessary for management; if we do not measure performance, it is hard to set goals and coordinate activities to a purpose. This statement is true for almost any aspect of a business, but particularly so for ...
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