Practice Quiz

Supply Chain Management

Category - Demand

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_______ and ______ are used to estimate the size of a forecast error.
  1. Mean Absolute Deviation; Mean Absolute Percentage Error
  2. Weighted Absolute Percentage Error; Real Aggregated Percentage Error
  3. Relative Measure of Accuracy; Mean Absolute Percentage Error
  4. Mean Absolute Deviation; Real Aggregated Percentage Error
Explanation
Answer: A - While forecasts are never accurate, they are necessary to prepare for authentic demand. In order to maintain an optimized inventory and effective supply chain, perfect demand forecasts are imperative. The MAD (Mean Absolute Deviation) and MAPE (Mean Absolute Percentage Error) are used to estimate the size of a forecast error.
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