Question: A manager has been using a certain technique (Forecast 1) to forecast demand for gallons of ice cream for the past 3 periods. The manager

A manager has been using a certain technique (Forecast 1) to forecast demand for gallons of ice cream for the past 3 periods. The manager is thinking of using Forecast 2 instead of Forecast 1 in the future. Calculate and state the MAD for each forecast and based on the MAD calculations, should the manager use Forecast 1 or Forecast 2 and state the proper reasoning? Note: MAD = mean absolute deviation. Select the correct answer. Period Actual Forecast 1 Forecast 2 1 90 90 100 2 84 89 86 3 91 87 99 MAD of Forecast 1 is 5.0; MAD of Forecast 2 is 3.33; Since the MAD of Forecast 2 is less than the MAD for Forecast 1, Forecast 2 is the best and most accurate forecast to use. MAD of Forecast 1 is 3.0; MAD of Forecast 2 is 6.67; Since the MAD of Forecast 1 is less than the MAD for Forecast 2, Forecast 1 is the best and most accurate forecast to use. MAD of Forecast 1 is 25.67; MAD of Forecast 2 is 56.0; Since the MAD of Forecast 1 is less than the MAD for Forecast 2, Forecast 1 is the best and most accurate forecast to use. MAD of Forecast 1 is 5.0; MAD of Forecast 2 is 6.67; Since the MAD of Forecast 1 is less than the MAD for Forecast 2, Forecast 1 is the best and most accurate forecast to use

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!