1. **Stating the problem:** We have actual sales and two forecast methods (M1 and M2) for 6 days. We need to calculate: - MAD (Mean Absolute Deviation) for M1 and M2 - MAPE (Mean Absolute Percentage Error) for M1 and M2 2. **Formulas:** - MAD = $\frac{1}{n} \sum_{i=1}^n |\text{Actual}_i - \text{Forecast}_i|$ - MAPE = $\frac{100}{n} \sum_{i=1}^n \left| \frac{\text{Actual}_i - \text{Forecast}_i}{\text{Actual}_i} \right|$ 3. **Calculate absolute errors for each day:** |Day|Actual|M1 Forecast|M2 Forecast|$|Actual - M1|$|$|Actual - M2|$| |---|------|----------|----------|------------|------------| |Mon|16|13|20|$|16-13|=3$|$|16-20|=4$| |Tue|20|20|21|$|20-20|=0$|$|20-21|=1$| |Wed|30|29|32|$|30-29|=1$|$|30-32|=2$| |Thu|27|28|27|$|27-28|=1$|$|27-27|=0$| |Fri|17|17|14|$|17-17|=0$|$|17-14|=3$| |Sat|25|26|29|$|25-26|=1$|$|25-29|=4$| 4. **Calculate MAD:** - MAD M1 = $\frac{3+0+1+1+0+1}{6} = \frac{6}{6} = 1.00$ - MAD M2 = $\frac{4+1+2+0+3+4}{6} = \frac{14}{6} \approx 2.33$ 5. **Calculate MAPE:** - MAPE M1 = $\frac{100}{6} \left( \frac{3}{16} + \frac{0}{20} + \frac{1}{30} + \frac{1}{27} + \frac{0}{17} + \frac{1}{25} \right)$ = $\frac{100}{6} (0.1875 + 0 + 0.0333 + 0.0370 + 0 + 0.04) = \frac{100}{6} (0.2978) \approx 4.96\%$ - MAPE M2 = $\frac{100}{6} \left( \frac{4}{16} + \frac{1}{20} + \frac{2}{30} + \frac{0}{27} + \frac{3}{17} + \frac{4}{25} \right)$ = $\frac{100}{6} (0.25 + 0.05 + 0.0667 + 0 + 0.1765 + 0.16) = \frac{100}{6} (0.7032) \approx 11.72\%$ **Final answers:** - Method 1's MAD = 1.00 - Method 2's MAD = 2.33 - Method 1's MAPE = 4.96% - Method 2's MAPE = 11.72%