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suter [353]
3 years ago
5

If the demand for a product was 16, 28, 20 and 24 units in four consecutive months, and the corresponding forecasts in those fou

r months were 20, 16, 20 and 30 units respectively, what is the MAD at the end of four months
Business
1 answer:
Igoryamba3 years ago
5 0

Answer:

5.5 units

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

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Explanation:

Given the following :

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Using the PV table:

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