Question

O HONGHAO Given forecast errors of 10,-8,1, and -3, what is the mean absolute deviation? ered f 1.00 Answer tion s page

Answer 1

Answer :-

Mean absolute deviation (MAD) is the average of absolute values of the forecast error. It can be replaced as :

MAD = Sum of absolute values of forecast errors / Number of periods.

MAD can also be described as the absolute error between actual and forecasted data. In the given question , forecasting errors for four periods are given as 10, -8, 1, -3.

We have to take the absolute values of the errors ignoring the (-) sign, so the errors will be 10,8,1,3.

Now,

MAD = 10 + 8 + 1 + 3/4

= 22/4

MAD = 5.5