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Why is MAPE misleading for products with low or intermittent sales?
MAPE divides each error by the actual value, so tiny actuals produce huge percentages and zero actuals make the calculation impossible. A product that sells one or two units can show an error of several hundred percent from a miss of a single unit, which distorts the average and says little about real business impact.
For low-volume or intermittent items, absolute measures are more meaningful. Options include:
- MAE: average error in units.
- WAPE: total absolute error divided by total actual volume.
- Scaled errors such as MASE, which compare your error with a naive forecast.
Also consider aggregating, for example evaluating at weekly rather than daily level, or by product group, because errors often partly cancel when summed. Choose the metric that reflects the decision, such as units wasted or sales lost.
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