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A company has actual unit demand for three consecutive years of 124, 126, and 135. The respective forecasts for the same three years are 120, 120, and 130. Which of the following is the resulting MAD value that can be computed from this data? A. 3 B. 5 C. 15 D. 123

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Answer:

B. 5

Step-by-step explanation:

Computation for Which of the following is the resulting MAD value that can be computed from this data

Using this formula

MAD Value=[(Actual unit demand-Respective forecasts)/Number of years]

Let plug in the formula

MAD Value = [(124 - 120) + (126 - 120) + (135 - 130)]/3 years

MAD Value =(4+6+5)/3 years

MAD Value = 15/3 years

MAD Value = 5

Therefore the MAD value that can be computed from this data is 5

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