A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225. Which of the following values reflects the mean absolute deviation for this data?
I feel like the actual demand numbers are pretty close to the forecast, so the MAD shouldn't be too high, but I can't remember the exact calculation steps.
No problem, I've got this. I'll just take the absolute value of the difference between each actual demand and the forecast, add them up, and divide by the number of data points.
Haha, mean absolute deviation? More like mean absolute head-scratching! But seriously, gotta go with B) on this one. Anything higher and the warehouse is gonna need a bigger storage unit.
This one's a tricky one, but I'm feeling confident with B) 12.5. Anything higher than that and the supply chain team is really dropping the ball, am I right?
Wait, isn't the mean absolute deviation supposed to be the average of the absolute differences between the actual and forecast values? I'm going with B) 12.5.
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