Evaluating and Comparing Forecasting Models

Abstract

Abstract Forecasting is a very important aspect of any business, and has enormous social, economic, and environmental impacts. Various forecasting models have been developed to help people make right decisions against future uncertainties. However, all forecasting models have distinct advantages and limitations. Selecting appropriate forecasting methods from numerous alternatives is crucial to success. This article briefly summarizes the state‐of‐the‐art forecasting methods in terms of basic procedure, underlying assumptions, applications, and limits. And then the most popular model selection criteria and guidelines are presented.