Determining Forecast Fit

Forecast fit refers to how successfully your chosen forecast method fits to your actuals. A forecast is considered a good fit if it captures all patterns and trends, but ignores random noise.

To determine whether your forecast method fits well, check out the following:

  • Forecast Fit – Residual Analysis
  • Out of Sample Testing / Holdout Sample
  • Forecast Error

 

Vanguard business forecasting applications display the forecast, actuals, residuals, errors, and the holdout sample for a complete view of your forecast fit.