Exhibit 18.2.The following table includes the information about a monthly time series. Refer to Exhibit 18.2.When the exponential smoothing method with α = 0.1 is applied,what is the mean absolute deviation (MAD)?
A)21.5
B)3.00
C)5.00
D)9.00

Question

Exhibit 18.2.The following table includes the information about a monthly time series.  Refer to Exhibit 18.2.When the exponential smoothing method with α = 0.1 is applied,what is the mean absolute deviation (MAD)?
A)21.5 
B)3.00 
C)5.00 
D)9.00

Quizplus · Accepted Answer

The exponential smoothing method with α = 0.1 will result in MAD of 3.00. This is because MAD is calculated as the average of the absolute differences between the actual values and the forecasted values, and the forecasted values using exponential smoothing with α = 0.1 are given in the table. Therefore, the best choice is B, as it is the only option that corresponds to this MAD value.