CFE is a cumulative sum. Figure 8.2

CFE is a cumulative sum. Figure 8.2(b) shows that it is the sum of the errors for all 10 periods.For any given period, it would be the sum of errors up through that period. For example, itwould be -8 1or -2 -62 for period 2. CFE is also called the bias error and results from consistentmistakes—the forecast is always too high or too low. This type of error typically causes the greatestdisruption to planning efforts. For example, if a forecast is consistently lower than actual demand,the value of CFE will gradually get larger and larger. This increasingly large error indicates somesystematic deficiency in the forecasting approach. The average forecast error, sometimes called themean bias, is simply