What is absolute error in SAP (SRD-SCM-DP - SCM-Demand Planning)?

SAP Term: absolute error

• Component: SRD-SCM-DP

• Component Name: SCM-Demand Planning

• Description: The difference between a measurement or estimate of a value and its true value. In demand planning absolute error is the difference between actual demand and forecasted demand for a given period expressed as an absolute value.

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• Key Concepts: 
  Absolute error is a measure of the difference between the forecasted value and the actual value in SAP Demand Planning. It is calculated by subtracting the actual value from the forecasted value. The absolute error is expressed as a positive or negative number, depending on whether the forecast was higher or lower than the actual value. 
  
  How to use it: 
  In SAP Demand Planning, absolute error can be used to measure the accuracy of a forecast. It can be used to compare different forecasting methods and to identify areas where improvements can be made. The absolute error can also be used to calculate other measures of accuracy, such as mean absolute error and mean absolute percentage error. 
  
  Tips & Tricks: 
  When using absolute error to measure forecasting accuracy, it is important to consider the magnitude of the errors as well as their direction. A large positive or negative error indicates that the forecast was far from accurate, while a small positive or negative error indicates that the forecast was relatively accurate. 
  
  Related Information: 
  Absolute error is related to other measures of forecasting accuracy, such as mean absolute percentage error and root mean square error. These measures are used to compare different forecasting methods and identify areas for improvement.