What is the mean absolute deviation of forecast

Question

Assignment:

1. 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.

2. 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

3. Given forecast errors of -30, -15, and +15m, the Mean Absolute Deviation (MAD) is?

• -10
• 15
• 10
• 20
• 60

4. 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%

5. 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

6. 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
• -10
• 3.5
• 9
• 10.5

7. 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.