Term

Definition
The Bias is simply the arithmetic mean of the errors. We would, of course, like it to be zero. A positive bias means that the model, on the average, forecasts low. Negative means the reverse.
Bias = ∑ (ActualForecast)
n



Term

Definition
MAD penalizes all errors equally, in direct proportion to their magnitude. You can interpret the MAD as meaning the amount by which the forecast model missed on the average.
MAD = ∑ ABS(ActualForecast)
n



Term
Mean Absolute Proportional Error (or Mean Absolute Percent Error). 

Definition
This is like MAD, but penalizes error on the basis of what proportion of the actual value it is rather than its raw numeric amount.
MAPE = ∑ ABS(ActualForecast) Actual
n 


Term

Definition
MSE, as we usually call it, is very much like the simple variance you learned in statistics. It penalizes larger errors much more heavily than smaller ones.
MSE =∑(ActualForecast)^{2}
n 


Term
Simple Exponential Smoothing 

Definition
The Simple Exponential Smoothing model is of the form
F_{t} = ∂ª ´Yt1 + (1a)´Ft1 

