Forecast accuracy (%)

Forecast-Accuracy
Forecast-Accuracy

Forecast Accuracy

 

Regarding the measurement of the forecast accuracy I would like to ask a question. The Formula 1 below shows a common (or intuitive) suggestion and is het one I would use as well. However, in SAP Formula 2 is applied and that makes me wondering if there is a best one.

Formula 1 favours the situation of underforecasting, while Formula 2 favours overforecasting.

Formula 1. FC acc (%) = max{ 1 – |Demand-Forecast|/Demand, 0}

Formula 2. FC acc (%) = max{ 1 – |Demand-Forecast|/Forecast, 0}

Do any of you have any further experience or thoughts about the difference in performance?

Kind regards,

Sjoerd