Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows: PREDICTED DEMAND

Period Demand F1 F2
1 68 63 66
2 75 70 67
3 70 75 70
4 74 69 72
5 69 70 73
6 72 68 75
7 80 70 77
8 78 74 84

Required:
Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate

Kindly check explanation

Explanation:

Given the data:

Period Demand F1 F2

1 68 63 66

2 75 70 67

3 70 75 70

4 74 69 72

5 69 70 73

6 72 68 75

7 80 70 77

8 78 74 84

Mean absolute deviation (MAD) for F1:

P___Demand(D) __F1__F2___|D - F1|___|D-F2|

1 68 63 __665 2

275 70__ 67 5 8

370 75__ 70 5 0

474 69__ 72 5 2

569 70__ 73 1 4

672 68__ 75 43

780 70__ 77 10 3

878 74__ 84 46

Mean absolute deviation (MAD) For F1 :

Σ(|D - F1|)/n :

(5 + 5 + 5 + 5 + 1 + 4 + 10 + 4) / 8

= 39 / 8

= 4.875

Mean absolute deviation (MAD) For F2 :

Σ(|D - F2|)/n :

(2 + 8 + 0 + 2 + 4 + 3 + 3 + 6) / 8

= 28 / 8

= 3.50

F2 seems to be more accurate has it has a Lower MAD value

answer; common market;