The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is
A) 2
B) -10
C) 3.5
D) 9
E) 10.5

Question

Quizplus · Accepted Answer

To calculate MAD, we need to first find the absolute deviations between the actual sales and forecasted sales:

Absolute deviations: 
|8-5| = 3 
|10-6| = 4 
|15-11| = 4 
|9-12| = 3

Next, we find the average of these absolute deviations:

MAD = (3+4+4+3)/4 = 3.5

Therefore, the answer is C.

The Last Four Months of Sales Were 8, 10, 15