The demand and forecast values are shown in the table below: The MAD through the end of October would be
A)9.20.
B)-9.20.
C)1.00.
D)7.00.

Question

The demand and forecast values are shown in the table below:  The MAD through the end of October would be
A)9.20. 
B)-9.20. 
C)1.00. 
D)7.00.

Quizplus · Accepted Answer

To calculate the MAD through the end of October, we need to take the absolute difference between the actual demand and the forecasted demand for each month from Jan to Oct, and then take their average. 
MAD = (|6-2| + |9-4| + |11-8| + |-2-4| + |5-8| + |10-10| + |7-9| + |8-6|)/8
MAD = 9.25/8 ≈ 1.156
Therefore, option A is the closest to our answer of 1.156.

The Demand and Forecast Values Are Shown in the Table