Forecast bias

A forecast bias occurs when there are consistent differences between actual outcomes and previously generated forecasts of those quantities; that is: forecasts may have a general tendency to be too high or too low. A normal property of a good forecast is that it is not biased.^[1]

As a quantitative measure , the "forecast bias" can be specified as a probabilistic or statistical property of the forecast error. A typical measure of bias of forecasting procedure is the arithmetic mean or expected value of the forecast errors, but other measures of bias are possible. For example, a median-unbiased forecast would be one where half of the forecasts are too low and half too high: see Bias of an estimator.

In contexts where forecasts are being produced on a repetitive basis, the performance of the forecasting system may be monitored using a tracking signal, which provides an automatically maintained summary of the forecasts produced up to any given time. This can be used to monitor for deteriorating performance of the system.

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^ APICS Dictionary 12th Edition, American Production and Inventory Control Society. Available for download at www.apics.org/Resources/APICSDictionary.htm.

v t e Biases
Cognitive biases	Acquiescence Ambiguity Anchoring Attentional Attribution Actor–observer Correspondence Authority Automation Availability Mean world Belief Blind spot Choice-supportive Commitment Confirmation Compassion fade Congruence Cultural Distinction Dunning–Kruger Egocentric Curse of knowledge Emotional Extrinsic incentives Fading affect Framing Frequency Frog pond effect Halo effect Hindsight Horn effect Hostile attribution Impact Implicit In-group Mean world syndrome Mere-exposure effect Negativity Normalcy Omission Optimism Out-group homogeneity Outcome Overton window Precision Present Pro-innovation Response Restraint Self-serving Social comparison Social influence bias Spotlight Status quo Substitution Time-saving Trait ascription Turkey illusion von Restorff effect Zero-risk In animals
Statistical biases	Estimator Forecast Healthy user Information Psychological Lead time Length time Non-response Observer Omitted-variable Participation Recall Sampling Selection Self-selection Social desirability Spectrum Survivorship Systematic error Systemic Verification Wet
Other biases	Academic Basking in reflected glory Funding FUTON Inductive Infrastructure Inherent In education Media False balance Vietnam War Norway South Asia Sweden United States Arab–Israeli conflict Ukraine Net Political bias Publication Reporting White hat
Bias reduction	Cognitive bias mitigation Debiasing Heuristics in judgment and decision-making
Lists: General Memory

This page was last edited on 18 January 2022, at 11:35

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