Demand for a Product and the Forecasting Department's Forecast (Naïve

Multiple Choice

Demand for a product and the forecasting department's forecast (naïve model) for a product are shown below. Compute the mean absolute error. ? $$\begin{array} { | c | c | c | } \hline \text { Period } & \text { Actual Demand } & \text { Forecasted Demand } \\\hline 1 & 12 & -- \\\hline 2 & 15 & 12 \\\hline 3 & 14 & 15 \\\hline 4 & 18 & 16 \\\hline\end{array}$$

A) 1
B) 1.5
C) 2
D) 2.5