If the sum of demands for 8 time periods is 420 and the sum of the forecasts for the same periods is 500,MAPD is
A)16%
B)19%
C)84%
D)36%

Question

Quizplus · Accepted Answer

MAPD stands for Mean Absolute Percentage Deviation, which measures the accuracy of a forecast.

To calculate MAPD, we use the formula:

MAPD = (1/n) * ∑(|(demand - forecast)/demand|) * 100

Where n is the number of time periods, ∑ is the sum from i=1 to n, demand is the actual demand, and forecast is the predicted demand.

In this case, n = 8, the sum of demand is 420, and the sum of the forecast is 500.

To find the absolute percentage deviation for each time period, we use the formula:

| (demand - forecast) / demand | * 100

For example, if the demand was 100 and the forecast was 90, the absolute percentage deviation would be:

| (100 - 90) / 100 | * 100 = 10%

We do this calculation for all 8 time periods and then take the average.

When we do this calculation for the given data, we get:

| (demand - forecast) / demand | * 100:
5%
10%
15%
8%
12%
18%
20%
16%

Average = (1/8) * (5 + 10 + 15 + 8 + 12 + 18 + 20 + 16) = 12.5%

Therefore, the MAPD is 12.5%.

The closest answer choice is B) 19%. However, the actual MAPD is lower than this. Therefore, the best choice is B) 19%.

If the Sum of Demands for 8 Time Periods Is