A forecasting method has produced the following data over the past 5 months shown in Data Set E2.What is the mean absolute deviation (accurate to 2 decimals)?
A)−0.60
B)−1.20
C)1.00
D)1.25

Question

Quizplus · Accepted Answer

The mean absolute deviation (MAD) is calculated by taking the absolute values of the differences between the forecasted values and the actual values, summing these absolute differences, and then dividing by the number of observations. The negative options (A and B) are incorrect because the MAD cannot be negative by definition. Without the specific data from Data Set E2, we cannot calculate the exact MAD value here, but the correct answer must be a positive value, making option C the correct choice by elimination and understanding of the concept.

A Forecasting Method Has Produced the Following Data Over the Past