A forecasting method has produced the following over the past five months. What is the mean absolute deviation? $$\begin{array} { | c | c | c | c | }
\hline \text { Actual } & \text { Forecast } & \text { Error } & \mid \text { Error } \mid \
\hline 10 & 12 & - 2 & 2 \
\hline 8 & 11 & - 3 & 3 \
\hline 10 & 9 & 1 & 1 \
\hline 6 & 6 & 0 & 0 \
\hline 9 & 6 & 3 & 3 \
\hline
\end{array}$$
A) -0.2
B) -1.0
C) 0.0
D) 1.8
E) 9.0

Question

A forecasting method has produced the following over the past five months. What is the mean absolute deviation? $$\begin{array} { | c | c | c | c | } 
\hline \text { Actual } & \text { Forecast } & \text { Error } & \mid \text { Error } \mid \
\hline 10 & 12 & - 2 & 2 \
\hline 8 & 11 & - 3 & 3 \
\hline 10 & 9 & 1 & 1 \
\hline 6 & 6 & 0 & 0 \
\hline 9 & 6 & 3 & 3 \
\hline
\end{array}$$
A) -0.2
B) -1.0
C) 0.0
D) 1.8
E) 9.0

Quizplus · Accepted Answer

The mean absolute deviation (MAD) is calculated by summing the absolute errors and dividing by the number of observations. Here, $2 + 3 + 1 + 0 + 3 = 9$, and dividing by 5 (the number of observations) gives $9 / 5 = 1.8$.

A Forecasting Method Has Produced the Following Over the Past