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12 December, 08:18

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecast were 9, 11, 8 and 12 units, respectively. What is the mean absolute deviation (MAD) value of these forecast?

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  1. 12 December, 08:44
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    3

    Explanation:

    Data provided in the question:

    Sales for the last four months:

    8, 10, 15, and 9 units

    Last four forecast of sales:

    9, 11, 8 and 12 units

    Now,

    The mean absolute deviation (MAD) value of these forecast will be calculated as:

    MAD = [ ∑|Sales - Forecast sales| ] : [ Total number of forecast ]

    or

    MAD = [ |8 - 9| + |10 - 11| + |15 - 8| + |9 - 12| ] : 4

    or

    MAD = [ 1 + 1 + 7 + 3 ] : 4

    or

    MAD = 12 : 4

    or

    MAD = 3
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