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 need to find the average of the absolute differences between each actual value and the forecasted value. We first need to calculate the forecast errors:

-1, 2, -3, 4, -5

Next, we take the absolute value of each error:

1, 2, 3, 4, 5

The mean of these values is (1+2+3+4+5)/5 = 3. Therefore, the mean absolute deviation is the average deviation from the forecasted values, which is 3. The closest option is D) 1.2, but this is not accurate, so the correct answer is D) None of the above.

A Forecasting Method Has Produced the Following Over the Past