Mean percentage error

Mean percentage error is a way to measure how much a guess or prediction is off from the actual answer, but it's explained in a way a 5 year old can understand.

Imagine your teacher asks you to guess how many jelly beans are in a jar. You guess 100, but there are actually 120 jelly beans inside. This means your guess was off by 20 jelly beans.

To calculate the mean percentage error, we use the following formula:

(MPE) = [( Actual - Forecast) / Actual] x 100

"Actual" means the real number of jelly beans (120) and "Forecast" means the number of jelly beans you guessed (100). So, we do the math:

MPE = [(120 - 100) / 120] x 100
MPE = (20 / 120) x 100
MPE = 0.1667 x 100
MPE = 16.67%

This means that your guess was off by approximately 16.67% of the actual number of jelly beans in the jar. In other words, if you had guessed 116 jelly beans instead of 100, your guess would have been only 3.33% off from the actual number of 120.

Overall, mean percentage error helps us understand how accurate our guesses or predictions are and can help us improve our future guesses by giving us a sense of how much we need to adjust or refine our predictions.