Concept: Forecast Range and Accuracy with Predictive Forecaster

The

Forecast Range

option provides a range of predictions for each data point in the forecast. To accomplish this, the forecast populates machine learning data into 3 versions that you specify:

The
Forecast Version
: The version that populates with the most likely values.
The
Upper Limit Version
: The version that populates with the highest probable values.
The
Lower Limit Version
: The version that populates with the lowest probable values.

To generate forecast ranges, you can select the

Forecast Range

check box when you edit or create forecasts.

You can also specify the

Probability Level

by percent. The

Probability Level

dictates how much to broaden the forecast range. A higher percent means that you want to increase the probability of the range. A higher percent results in broader ranges between the upper and lower limits. A lower percent means that you want to decrease the range of probability. A lower percent results in a narrower range between the upper and lower limits.

To help you visualize the forecast range, we display the 3 forecasts as a fan chart in the 

Confidence Metrics

subsection of the

Forecast History

page. For the latest run only, we also display a trend line in the chart.

You can also review all 3 versions in the sheet, or build reports that compare them.

The

Accuracy Metric

option measures how close the predicted values are to reality. You can test the accuracy of your forecast by selecting the

Accuracy Metric

check box when you create or edit forecasts. This option generates a back-test. In a back-test, the algorithm predicts data for a portion of the time range that exists in the actuals data of reference versions. It then compares how accurate the predictions are against the actuals. The result is a chart with a percentage that reflects the algorithm's score.

Example: The reference data includes data from January 2021 to December 2023 for a forecast period of June 2024 to December 2024. The back-test predicts data for the time period of July 2022 to December 2022 and checks those predictions against the reference data that already exists. An 80% accuracy rate means that the predictions were correct 80% of the time during the period between July 2022 and December 2022.

The

Forecast Range

and

Probability Level

affect the

Accuracy Metric

. You're likely to see higher accuracy when you have define forecasts ranges with higher probability levels. Example: For 80% accuracy on a forecasts without

Forecast Range

enabled, the algorithm would have to predict the exact value 80% of the time. When you enable

Forecast Range

with a 95%

Probability Level

, the forecasts needs to predict values within the broader range 80% of the time.