In forecasting,what is the Mean Absolute Deviation (MAD)?
A)It is the difference between the forecast and actual demand.
B)It is the average,absolute difference between the forecast and actual demand.
C)It is the absolute error as a percentage of demand.
D)It is the per-period average of cumulative error.

Question

Quizplus · Accepted Answer

Mean Absolute Deviation (MAD) is calculated as the average of the absolute differences between the forecasted values and the actual values, without considering the direction of the error. This makes option B the correct definition.

In Forecasting,what Is the Mean Absolute Deviation (MAD)