Question

Following are two weekly forecasts made by two different methods for the number of gallons of gasoline, in thousands, demanded at a local gasoline station. Also shown are actual demand levels, in thousands of gallons Week Week Forecast Method 1 0.95 1.02 0.92 1 17 Actual Demand 0.72 100 107 Forecast Method 2 0.82 120 Actual Demand 0.72 092 1.11 107 1.00 1.00 The MAD for Method 1 - thousand gallons (round your response to the decimal places) Enter your answer in the answer box and then click Check Answer

Answer 1

Demand forecasting is nothing but predicting the future demand of product or service based on the past events or current trends.

Mean absolute deviation is the distance between each data unit and mean.

Earor = Betual - forecast Absolut еxнок - Челя) MAD = Sun of absolute beror n Week Foorecast Method i 0.95 1.02 10-92 I 1017 Actual Error Demand 0.12 0.12 -0.95 = 1.00 1.00 -1.02= 1.07 1.07-0-92 = 1.00 1.00 - 1.17 = -0.23 -0.02 0.15 -0.17 Absolute error To 23 0.02 0.15 017 0:57 AAD = 0.57 4 = 0°1425 or 10-143 Answer