Question

If the MAD for a forecast is 3.2, we can say that a. The forecast is 3.2 units too high on the average b. The forecast is 3.2 units too low on the average c. The forecast is accurate within plus or minus 3 percent d. The forecast is accurate within plus or minus 3.2 units e. The forecast is accurate within plus or minus 10.24 units

Answer 1

The forecast is accurate within plus or minus 3.2 units

Explanation:

Mean Absolute Deviation is a statistical measure of dispersion from forecast. It measures accuracy level of predicted forecast, by averaging the difference between absolute value of each error from forecasted value.

MAD for a forecast states that : Forecast is accurate within the expected range variation of Mean Absolute Deviation.

So : If the MAD for a forecast is 3.2, we can say that - The forecast is accurate within plus or minus 3.2 units