chapter  10
10 Pages

EVALUATION OF FORECASTS

The cost of a prediction error can be substantial. The forecaster must always find ways to improve his forecasts. One way is to examine some objective evaluations of alternative forecasting techniques. This section presents guidelines for such evaluations. Two evaluation techniques are presented here. The first is in the form of a checklist. A forecaster could use it to evaluate either a new model being developed or an existing model. The second is a statistical technique for evaluating a model.