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What is the difference between MAE and RMSE for forecast error?
MAE is the average size of errors in the original units, treating all errors equally. RMSE squares errors before averaging and then takes the square root, so it penalises large misses much more. Use MAE for a straightforward typical error and RMSE when big misses are disproportionately costly.
If errors are 2, 2 and 20 units, MAE is 8 while RMSE is about 11.7, because the single large miss dominates.
RMSE is also more sensitive to outliers and data errors, so a few bad records can make it look poor. MAE is more robust and easier to explain.
Neither is percentage-based, so they are hard to compare across products with different volumes. Report them at a level where the units are meaningful, and consider showing both.
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