The forecast for last period was 100 units and the actual demand was 110 units which means that the forecast error was -10 units.
What is Forecast error?
This is defined as the difference between the actual or real and the predicted or forecast value in a particular subject of interest which in this case is in the form of units.
We were told that the forecast value was 110 units while the actual demand was 110 units which means that:
100 units - 110 units = -10 units.
This is therefore the reason why -10 units was chosen as the most appropriate choice.
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The options are:
- -110 units
- -0 units
- -10 units
- -20 units.
