Abstract
In Forecast Value Added (FVA) analysis the accuracy of relatively sophisticated forecasting methods is compared to that of naïve 1 forecasts to see if the extra costs and effort of implementing them is justified. In this note we derive a ratio that indicates the upper bound of a forecasting method's accuracy relative to naïve 1 forecasts when the mean squared error is used to measure one-period-ahead accuracy. The ratio is applicable when a series is stationary or when its first differences are
Original language | English |
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Pages (from-to) | 1082-1084 |
Journal | Journal of the Operational Research Society |
Volume | 68 |
Issue number | 9 |
Early online date | 27 Mar 2017 |
DOIs | |
Publication status | Published - Sept 2017 |
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Fotios Petropoulos
- Management - Professor
- Information, Decisions & Operations - Chair in Management Science
- Smart Warehousing and Logistics Systems - Member
Person: Research & Teaching, Researcher