company has actual unit demand for three consecutive years of 124,126,and 135.The respective forecasts for the same three years are 120,120,and 130.Which of the following is the resulting MAD value that can be computed from this data?
A)1
B)3
C)5
D)15
E)123

Question

Quizplus · Accepted Answer

MAD (Mean Absolute Deviation) is calculated by taking the average of the absolute differences between the actual demand and the forecasted demand. 
For year 1, absolute difference = |124-120| = 4
For year 2, absolute difference = |126-120| = 6
For year 3, absolute difference = |135-130| = 5
Therefore, MAD = (4+6+5)/3 = 5.

Company Has Actual Unit Demand for Three Consecutive Years of 124,126,and