Comparison of Competing Forecasting Models

Performance Measure Description Interpretation Advantages Disadvantages Mean Absolute Error (MAE) Average absolute difference between forecast and actual values. Lower MAE indicates better accuracy. Easy to understand and interpret. Robust to outliers. Doesn’t penalize large errors more than small ones. Mean Squared Error (MSE) Average squared difference between forecast and actual values. Lower MSE indicates better […]

Model and Selection

What is a Model? In the context of forecasting and business analytics, a model is a simplified representation of a real-world situation or process. It’s like a blueprint or a miniature version that helps us understand, analyze, and make predictions about something complex. Example Models are essential because the real world is often too complex […]

Forecasting Methods

Forecasting methods are the techniques used to predict future outcomes based on past data and trends. They’re like having a crystal ball, but instead of magic, they use data and statistics!   Here’s a breakdown of some common forecasting methods: 1. Qualitative Methods These methods rely on human judgment, intuition, and experience. They’re often used […]

Business Analytics: The bigger picture

Imagine you’re a business owner trying to figure out why your sales are down. You could guess, or you could use business analytics. In simple terms, business analytics is like a detective for your business. It uses data to uncover clues and insights that help you make better decisions. Instead of relying on gut feelings, […]