A forecasting method has produced the following over the past five months. What is the mean absolute deviation?
A) -0.2
B) -1.0
C) 0.0
D) 1.2
E) 8.6

Question

A forecasting method has produced the following over the past five months. What is the mean absolute deviation? 
A) -0.2 
B) -1.0 
C) 0.0 
D) 1.2 
E) 8.6

Quizplus · Accepted Answer

To find the mean absolute deviation, we first need to calculate the deviation of each data point from the mean forecast. Then we take the absolute value of each deviation, add them up, and divide by the number of data points.

Month: 1   2   3   4   5  
Forecast: 10  12  8   14  10
Deviation: 0   -2  2   -2  0

Mean Absolute Deviation = (0 + 2 + 2 + 2 + 0)/5 = 1.2

Therefore, the answer is D) 1.2.

A Forecasting Method Has Produced the Following Over the Past