Model Inaccuracy

[ishitaa25076879]

Hi Guys,

I was comparing Model accuracy reports for forecasted cost (budget) and forecasted revenue for a portfolio to the actual cost and revenue. I had a 11% deviation in last 7 days for cost forecast and 10% for revenue forecasts.

What should I consider to be the level of accuracy that Is acceptable? Is there a generic rule around it?

[nidhik · Accepted solution]

Hi Ishitaa,

There is no set rule/figure for model accuracy, however, as long as it stays in plus minus 10%-15% window, it should be ok depending upon the industry and business nature as there are always some external factors that are not in control. If it under or over performs then you may investigate it further by clicking on the model accuracy link and see how your actual performance is vs the predicted and take necessary actions accordingly.

Hope this helps.

Regards

Nidhi