What is the primary purpose of the statistical error measures in forecasting?

The primary purpose of statistical error measures in forecasting is to assess the accuracy of forecasts. These measures provide quantitative indicators that reflect how close the forecasted values are to the actual observed values. By analyzing errors, such as mean absolute error or root mean square error, organizations can evaluate the reliability of their forecasting methods, make adjustments as needed, and improve overall predictive performance. This ensures that decisions based on forecasts are informed by a clear understanding of their potential accuracy and reliability, crucial for effective planning in supply chain management and other operational processes.