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Forecasting Bias

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    Forecasting Bias

    Hi All,

    I am trying to calculate a forecast Bias. I am getting the #DIV/01 if either of the fields is 0 - which in my case will happen often. Is there an a formula you can think of that can calculate the forecast bias if either of the forecast or actual show as 0?

    Thanks in advance,
    Lee.
    Last edited by Wilkins1985; 02-04-2021 at 11:24 AM. Reason: typo

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    Forum Expert Pepe Le Mokko's Avatar
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    Re: Forecasting Bias

    Administrative note

    Welcome to the forum

    in your haste to solve your problem, you probably missed the yellow banner advising how to get answers faster by posting a sheet ?

    Please take a moment to read it and attach a sheet accordingly.

    Thanks you for helping us help you

  3. #3
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    Re: Forecasting Bias

    How much of this is an Excel question and how much is a statistics/forecasting question? You don't say how you are currently calculating bias, so it is difficult to know why you are getting a div/0 error.

    If this is more of a statistical question, I put "forecasting bias formula" into my favorite search engine and found this as the first result: https://demand-planning.com/2017/01/...forecast-bias/ He gives three different ways to calculate bias:
    1) bias = actual - forecast <- this should have no problems with 0 values.
    2) tracking signal =(actual-forecast)/ABS(actual-forecast). This, too, doesn't look like it should have problems when one or the other is 0, but will error if both are 0 (or both are exactly the same)
    3) normalized forecast metric NFM=(forecast-actual)/(forecast+actual). This, too, should not have trouble with 0 values, unless both are exactly 0.
    Quote Originally Posted by shg
    Mathematics is the native language of the natural world. Just trying to become literate.

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