How do you calculate the forecast error for one period What

How do you calculate the forecast error for one period? What does a negative value mean? i.e. was the forecast overestimating or underestimating what really occurred

Solution

Forecast error for one period can be calculated as the difference between the actual value and the forecast value. The formula that can be used for one period is = [(actual - forecast)/actual]*100

Negative value will come when the actual value is less than forecast value. This is a case of overforecasting or forecast overestimating. The forecast has to be as close to the actuals as possible. If it is greater than the actual value, it means that the forecast model has overestimated.