Question: Rachel gets a negative average error when applying a forecasting method for forecasting guests coming to her hotel - what does that imply? Error =
Rachel gets a negative average error when applying a forecasting method for forecasting guests coming to her hotel what does that imply?
Error Actual Forecast
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It implies nothing in terms of Rachel's decision making for anticipating and preparing for future guests.
Rachel will have to bear the cost of empty rooms and extra staffresources more often than not. An overforecasting bias meaning that the forecast may be higher than the actual demand over a period of time.
Rachel will have to turn away guests more often than not. An underforecasting bias means that the forecast may be lower than the actual demand over a period of time.
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