Question

In forecasting, the mean absolute deviation expresses

• A. Gross error
• B. Direction and magnitude of the error
• C. Direction of the error
• D. Magnitude of the error

Answer 1

Answer:

D. Magnitude of the error

Mean absolute deviation (MAD) in forecasting expresses the magnitude of forecast error for a given period without considering its sign. It is calculated as the average value of forecast error for a certain period. On the other hand, BIAS or Mean forecast error measures the forecast error with regard to direction and shows any tendency of overcast or undercast.