The department manager using a combination of methods has forecast sales of toasters at a local department store. Calculate the MAD for the manager's forecast. Compare the manager's forecast against a naive forecast covering the same time period
Which is better?
Month Unit Sales Manager's Forecast
January 52
February 61
March 73
April 79
May 66
June 51
July 47 50
August 44 55
September 30 52
October 55 42
November 74 60
December 125 75
Month Actual Manager's Abs. Error Naive Abs. Error
January 52
February 61
March 73
April 79
May 66
June 51
July 47 50 3 51 4
August 44 55 11 47 3
September 30 52 22 44 14
October 55 42 13 30 25
November 74 60 14 55 19
December 125 75 50 74 51
The manager's forecast has a MAD of 18.83, while the naive is 19.33. Therefore, the manager's forecast is slightly better than the naive.
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