 A new metric of absolute percentage error for intermittent demand forecastsSungil Kim and Heeyoung Kim International Journal of Forecasting, 2016, vol. 32, issue 3, 669-679 Abstract: The mean absolute percentage error (MAPE) is one of the most widely used measures of forecast accuracy, due to its advantages of scale-independency and interpretability. However, MAPE has the significant disadvantage that it produces infinite or undefined values for zero or close-to-zero actual values. In order to address this issue in MAPE, we propose a new measure of forecast accuracy called the mean arctangent absolute percentage error (MAAPE). MAAPE has been developed through looking at MAPE from a different angle. In essence, MAAPE is a slope as an angle, while MAPE is a slope as a ratio, considering a triangle with adjacent and opposite sides that are equal to an actual value and the difference between the actual and forecast values, respectively. MAAPE inherently preserves the philosophy of MAPE, overcoming the problem of division by zero by using bounded influences for outliers in a fundamental manner through considering the ratio as an angle instead of a slope. The theoretical properties of MAAPE are investigated, and the practical advantages are demonstrated using both simulated and real-life data. Keywords: Accuracy measure; Forecast evaluation; Intermittent demand; MAPE (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:32:y:2016:i:3:p:669-679 DOI: 10.1016/j.ijforecast.2015.12.003 Access Statistics for this article International Journal of Forecasting is currently edited by R. J. Hyndman More articles in International Journal of Forecasting from Elsevier |
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