If you were selecting from a variety of forecasting models based on MAD, which of the following MAD values from the same data would reflect the most accurate model? The data being referenced in the question are (Forecast errors of - 5, - 10, and + 15, the MAD is 10) The following are the answer choices

A. 0.2

B. 0.8

C. 1.0

D. 10.0

E. 100.0

The answer is option D (10.0)

The MAD value of 10.0, from the same data would reflect the most accurate model

Explanation:

The method of finding the mean absolute deviation (MAD) of data (-5, - 10, + 15) is stated below:

Step 1

Find the mean of the data set.

That is, find the sum of the data values, and divide the sum by the number of data values. (mean = 0)

Step 2

Find the absolute value (only positive values) of the difference between each data value and the calculated mean in step 1

That is, |data value - mean|

Step 3

Find the sum of the absolute values of the differences.

(5 + 10 + 15)

Step 4

Finally, Divide the sum of the absolute values of the differences by the number of data values.[ (5 + 10 + 15) / 3 = 10]

Answer:C