What is time-dependent error variance in SAP CA-DDF-RT - Demand Data Foundation for Retail?

SAP Term: time-dependent error variance

• Component: CA-DDF-RT

• Component Name: Demand Data Foundation for Retail

• Description: Error variance value calculated for a specific point in time of the forecast horizon. Example For daily error variances, a time-dependent error variance is calculated for each day of the forecast horizon of a specific product in a specific location.

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• Key Concepts: 
  Time-dependent error variance is a concept used in the CA-DDF-RT Demand Data Foundation for Retail component of SAP. It is a measure of the variability of the errors in a time series model. It is calculated by taking the sum of the squared errors for each time period and dividing it by the number of time periods. 
  
  How to use it: 
  Time-dependent error variance can be used to assess the accuracy of a time series model. It can be used to compare different models and determine which one is more accurate. It can also be used to identify trends in the data and identify potential problems with the model. 
  
  Tips & Tricks: 
  When using time-dependent error variance, it is important to remember that it is only an estimate of the accuracy of a model. It should not be used as a definitive measure of accuracy. Additionally, it should not be used as a substitute for other measures such as mean absolute error or root mean square error. 
  
  Related Information: 
  Time-dependent error variance is related to other measures of accuracy such as mean absolute error and root mean square error. Additionally, it is related to other concepts such as autocorrelation and stationarity. Understanding these concepts can help improve the accuracy of time series models.