Question

Given forecast errors of ( -1,4,8 ), and 2.5 , what is the mean absolute deviation? (round to two decimal place) Your Answer:

Answer 1

The mean absolute deviation of the forecast errors (-1, 4, 8, 2.5) is 3.88 when rounded to two decimal places.

Step-by-step explanation:

To calculate the mean absolute deviation, also known as the average absolute deviation, we start by finding the absolute value of each forecast error.

• Absolute value of -1: | -1 | = 1
• Absolute value of 4: | 4 | = 4
• Absolute value of 8: | 8 | = 8
• Absolute value of 2.5: | 2.5 | = 2.5

Next, we add these absolute values together and divide by the number of observations to get the mean absolute deviation:

(1 + 4 + 8 + 2.5) / 4 = 15.5 / 4 = 3.875

Rounding to two decimal places, the mean absolute deviation is 3.88.