Question

Calculate the mean absolute deviation (MAD) for the months of January through April using the following data: Month Actual Sales Forecast

January 1000 600
February 1600 2500
March 2000 1500
April 1800 2000

Answer 1

To calculate the mean absolute deviation, find the absolute difference between actual sales and forecast for each month, sum these differences, and then divide by the number of months. For the given data, the MAD turns out to be 500.

Step-by-step explanation:

To calculate the mean absolute deviation (MAD) for the given sales data, you need to follow these steps:

1. Find the difference between the Actual Sales and the Forecast for each month.
2. Calculate the absolute value of these differences.
3. Sum up all the absolute differences.
4. Divide this sum by the number of months to find the mean.

Let's do these calculations:

• January: |1000 - 600| = 400
• February: |1600 - 2500| = 900
• March: |2000 - 1500| = 500
• April: |1800 - 2000| = 200

Sum of absolute differences = 400 + 900 + 500 + 200 = 2000

Since there are 4 months, we divide the sum by 4:

MAD = 2000 / 4 = 500

The mean absolute deviation for the months of January through April is 500.