The actual demand and the forecasted demand for a product were as follows: Compute the MAPE.
A)0.77%
B)7.7%
C)0.23
D)23
E)6.9%

Question

The actual demand and the forecasted demand for a product were as follows:  Compute the MAPE.
A)0.77% 
B)7.7% 
C)0.23 
D)23 
E)6.9%

Quizplus · Accepted Answer

The MAPE can be calculated using the formula: 
MAPE = (1/n) * Σ(|A_t - F_t|/A_t) * 100%
where A_t is the actual demand at time t, and F_t is the forecasted demand at time t. 
Using the given data, we have: 
n = 6 (there are 6 periods)
A_t = [20, 20, 25, 22, 18, 24]
F_t = [19, 19, 23, 23, 20, 23]
Plugging these values into the formula, we get: 
MAPE = (1/6) * Σ(|A_t - F_t|/A_t) * 100%
MAPE = (1/6) * [(|20-19|/20) + (|20-19|/20) + (|25-23|/25) + (|22-23|/22) + (|18-20|/18) + (|24-23|/24)] * 100%
MAPE = 0.077 or 7.7% 
Therefore, the best choice is B, which is the only option that matches the calculated MAPE.

The Actual Demand and the Forecasted Demand for a Product