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Homework answers / question archive / The primary purpose of the mean absolute deviation (MAD) in forecasting is to: estimate the trend line
The primary purpose of the mean absolute deviation (MAD) in forecasting is to: estimate the trend line. eliminate forecast errors. measure forecast accuracy. seasonally adjust the forecast. remove random variations. A manager uses the following equation to predict monthly receip0ts: Yt - 40,000 + 150t. What is the forecast for Sep this year if t = 1 corresponds to Aug of last year? 41800 42600 41950 42500 42100 Given forecast errors of -30, -15, and +15m, the Mean Absolute Deviation (MAD) is? -10 15 10 20 60 Given actual demands of 80, 100, 75 and forecast errors of -20, -10, and +15 for the last three months, respectively, the Mean Absolute Percentage Error (MAPE) is? 18.33% 15% 55% 8.33% 4.67% Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? 0 1 dividend by the number of periods 0.5 1.0 cannot be determined Suppose that the last four months of sales 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecasts were 5, 6, 11, and 12 units, respectively. What is the Mean Absolute Deviation (MAD) of these forecasts? 2 -0 3.5 9 10.5 For a given product demand, the time-series trend equation is 53 - 4x. The negative sign on the slope of the equation: is a mathematical impossibility.
33) The primary purpose of the mean absolute deviation (MAD) in forecasting is to:
Answer: C measure forecast accuracy
The mean absolute deviation is designed to provide a measure of overall forecast error for the model.
34) What is the forecast for September this year?
Answer: A) 41,800
Given forecasting equation Yt = 40,000 + 150t
Solving Y12 = 40,000 + 150 * 12 = 41,800
35) MAD?
Answer: D) 20
Given forecast errors -30, -15, and +15
MND = sum of (30 + 15 + 15) / 3
MND = 20
37) Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?
Answer: D) 1.0
38) The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is
Answer: C) 3.5
Solution:
8 – 5 = 3
10 – 6 = 4
15 – 11 = 4
9 – 12 = -3
(3 + 4 + 4 + 3) / 4 = 3.5
39) For a given product demand, the time-series trend equation is 53 - 4x. The negative sign on the slope of the equation:
Answer: C) is an indication that product demand is declining.
