Forecast error is the difference between the actual value and the forecast value. For example, if a company forecasts that its sales will be 100,000 € for January, but actual sales turn out to be 95,000 €, then the forecast error would be 5,000 €.
Forecast error can occur due to several factors, such as incorrect assumptions about future market conditions or changes in consumer behavior. Companies typically use various techniques to minimize forecast error, such as using multiple data sources and conducting sensitivity analyses.
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