Answered: Describe MAD error?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Describe MAD error?

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Forecasting:

Forecasting is the process of identifying the demand accurately for future production planning and decision-making purposes. It is an important area of manufacturing organizations as forecasting plays a vital role in the efficiency of the organization.

Mean absolute deviation (MAD):

MAD of a dataset is the average distance between the mean of a data set and each of the data points. It is a useful measure in evaluating the variability in the dataset. MAD weights all the errors in the dataset in an even manner. MAD is used to study alternative forecasts. The error performance is tracked over time to know if the error performance is getting better or staying the same.

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