0

I am using the MAPE formula, ABS(actual-forecast)/actual *100, but this raises problems when the actual values are zero. Is it possible to add 1 to the denominator and calculate this way? Would I get accurate percent error data, as long as I am consistent with the formula? Any ideas are appreciated, thank you

user42
  • 1
  • Adding $1$ is not a good idea beacause it is arbitrary. But there are alternatives in that case, look: https://en.wikipedia.org/wiki/Mean_absolute_percentage_error#Alternative_MAPE_definitions – Augustin Aug 05 '15 at 08:53
  • If the actual value is zero, it does not make sense to calculate the PERCENT error (only if the forecast is also zero, you could say that the percent error is $0$, although the formula still contains an undefined $\frac{0}{0}$-fraction). Note that every positive number is "infinite-times" larger than $0$. – Peter Aug 05 '15 at 09:09

0 Answers0