Given forecast errors of $4$, $8$, and $-3$, what is the mean absolute deviation?

• A. $\frac{9}{3}$ = $3$
• B. $\frac{5}{3}$ ≈ $1.67$
• C. $\frac{15}{3}$ = $5$
• D. $\frac{7}{3}$ ≈ $2.33$

Answer: (C)

Verified step by step guidance

1. Identify the forecast errors given: 4, 8, and -3.
2. Calculate the absolute value of each forecast error to remove any negative signs. This means converting each error to its positive magnitude: |4|, |8|, and |-3|.
3. Sum the absolute values obtained in the previous step to get the total absolute deviation.
4. Count the number of forecast errors, which in this case is 3.
5. Calculate the mean absolute deviation (MAD) by dividing the total absolute deviation by the number of errors using the formula: \(\text{MAD} = \frac{\sum |\text{errors}|}{n}\), where \(n\) is the number of errors.