The weighted mean absolute percentage error (WMAPE), which is also called the MAD/mean ratio, is the sum of absolute errors divided by the sum of the historical sales values. WMAPE is calculated the following way:

Formula for Calculating WMAPE

Variables used in the formula:

  • V(t): Historical value in period t

  • P(t): The value of the ex-post forecast in period t

  • n: The number of periods for which the ex-post forecast is calculated