The primary purpose of the mean absolute deviation (MAD) in forecasting is to
A) estimate the trend line
B) eliminate forecast errors
C) measure forecast accuracy
D) seasonally adjust the forecast
E) all of the above

Question

Quizplus · Accepted Answer

The primary purpose of the mean absolute deviation (MAD) in forecasting is to measure forecast accuracy. It provides a measure of the average deviation between actual values and forecasted values, indicating how close the forecasts are to the actual values. MAD cannot estimate the trend line, eliminate forecast errors, or seasonally adjust the forecast. Thus, options A, B, and D are incorrect. Option E is not the best choice as only option C is correct.

The Primary Purpose of the Mean Absolute Deviation (MAD) in Forecasting