Question

If the demand for a product was 16, 28, 20 and 24 units in four consecutive months, and the corresponding forecasts in those four months were 20, 16, 20 and 30 units respectively, what is the MAD at the end of four months

Answer 1

5.5 units

Step-by-step explanation:

Period Actual Forecast Absolute deviation

1 16 20 4

2 28 16 12

3 20 20 0

4 24 30 6

Total 22

Mean absolute deviation(MAD) = Sum of absolute deviation / Number of periods

Mean absolute deviation(MAD) = 22 / 4

Mean absolute deviation(MAD) = 5.5 units