Asked by Dayne Krachey on May 29, 2024

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The most commonly used measures of forecast accuracy are the:

A) mean absolute deviation and the sum of squares for forecast errors
B) sum of squares for forecast error and seasonal indexes
C) seasonal indexes and the percentage of trend
D) all of these choices are correct

Forecast Accuracy

The degree to which forecasted values correspond with actual values over a specified period.

Mean Absolute Deviation

Mean absolute deviation measures the average absolute distances between each data point in a set and the set's mean, providing an overview of variability.

Sum of Squares

A statistical technique used to describe the total variation in a dataset, which is the sum of the squared differences from the mean.

  • Identify the conceptual and applied dimensions of various forecast accuracy metrics.
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EM
erica meyersJun 02, 2024
Final Answer :
A
Explanation :
The mean absolute deviation (MAD) and the sum of squares for forecast errors (SSE) are the most commonly used measures of forecast accuracy because they are easy to calculate and understand. MAD measures the average absolute deviation of the forecast from the actual values, while SSE measures the variance of the forecast errors. Both provide a measure of how accurate the forecast is, and can be used to compare different forecasting methods or models. Seasonal indexes and percentage of trend are also important measures, but are typically used in conjunction with MAD and SSE to provide a more complete picture of forecast accuracy.