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GATE 2025 ME – Question 37

Production Planning and Control · Forecasting models · 2 marks · Multiple choice

Considering the actual demand and the forecast for a product given in the table below, the mean forecast error and the mean absolute deviation, respectively, are

Period12345678910
Actual demand425415420430427418422416426421
Forecast427422416422423420419418430415
  1. 0.8 and 42.0
  2. 0.8 and 4.2
  3. 8.0 and 42.0
  4. 8.0 and 4.2

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Correct answer: (B) 0.8 and 4.2

Explanation

The error in each period is actual minus forecast: $-2, -7, 4, 8, 4, -2, 3, -2, -4, 6$. The errors add up to 8, so the mean error is $0.8$. The absolute errors add up to $2 + 7 + 4 + 8 + 4 + 2 + 3 + 2 + 4 + 6 = 42$, so the mean absolute deviation is $4.2$.