What is mean absolute deviation in SAP SCM-APO-PPS - Production Planning and Detailed Scheduling?

SAP Term: mean absolute deviation

• Component: SCM-APO-PPS

• Component Name: Production Planning and Detailed Scheduling

• Description: Forecast error measurement. The mean absolute deviation MAD of forecast values from actual values provides you with information on the forecast distribution and, therefore, on the quality of the forecast.

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• Key Concepts: 
  Mean absolute deviation (MAD) is a measure of dispersion used in SAP's Production Planning and Detailed Scheduling (PPS) component of the Supply Chain Management (SCM) application. It is used to measure the variability of a set of data points from their mean. MAD is calculated by taking the average of the absolute values of the differences between each data point and the mean. 
  
  How to use it: 
  MAD can be used to measure the variability of a set of data points from their mean. This can be useful for understanding how much variation there is in a given set of data points. For example, if you are looking at sales data for a particular product, you can use MAD to determine how much variation there is in the sales figures from month to month. 
  
  Tips & Tricks: 
  When using MAD, it is important to remember that it only measures variability and does not take into account any underlying trends or patterns in the data. Additionally, MAD should not be used as a substitute for other measures of dispersion such as standard deviation or variance. 
  
  Related Information: 
  MAD is closely related to other measures of dispersion such as standard deviation and variance. It is also related to other measures of central tendency such as mean and median. Understanding these related concepts can help you better understand how MAD works and how it can be used in SAP's Production Planning and Detailed Scheduling component.