Question

The following shows the performance of a forecasting method: YEAR ACTUAL DEMAND (units) FORECAST (units) 1 3765 3821 2 3674 3615 3 3726 3758 Based on these information, the mean absolute deviation (MAD) for this forecasting method is

a. +147 b. -29 c. +32 d. None of the above

Answer 1

Question: The following shows the performance of a forecasting method: YEAR ACTUAL DEMAND (units) FORECAST (units) 1 3765 3821 2 3674 3615 3 3726 3758 Based on these information, the mean absolute deviation (MAD) for this forecasting method is

Answer: None of the above

Explanation:

Given that:

Now:

Mean Absolute Deviation (MAD) is given by:

MAD = |Error| / n

Here: |Error| = |Actual Demand - Forecast|

Therefore:

MAD = ((|3765 - 3821|) + (|3674 - 3615|) + (|3726 - 3758|)) / 3

MAD = (56 + 59 + 32) / 3

MAD = 147 / 3

MAD = 49