Question

Calculate​ (a) MAD and​ (b) MSE for the following forecast versus actual sales​ figures: a. Forecast 100 110 120 130 b. Actual 95 108 123 130 ​a) MADequals nothing ​(round your response to one decimal​ place).

Answer 1

MAD = 2.5

MSE = 9.5

Step-by-step explanation:

MAD and MSE are 2 of the 3 the approaches to calculate forecasting errors.

• MAD formula and solution is provided in the picture attached, with table 1 mentioned on it.

Step by Step Calculation of MAD:

1. Calculate the Forecast Error by subtracting Forecast from Actual Sales.
2. Sum all the forecast errors.
3. Divide the sum with the number (n) of periods.

• MSE formula and solution is provided in the picture attached, with table 2 mentioned on it.

Step by Step calculation of MSE:

1. Calculate the Forecast Error by subtracting Forecast from Actual Sales.
2. Square all forecast errors and sum those squared values.
3. Divide the sum with the number (n) of periods.