The mean absolute deviation (MAD) is a measure of variability that indicates the average distance between observations and their mean. MAD uses the original units of the data, which simplifies interpretation. Larger values signify that the data points spread out further from the average. Conversely, lower values correspond to data points bunching closer to it. The mean absolute deviation is also known as the mean deviation and average absolute deviation1.
The formula for the mean absolute deviation is the following:
MAD = (#|X - X#|) / N
Where:
*X = the value of a data point
*X# = the mean of the data points
*|X - X#| = the absolute deviation of a data point from the mean
*N = the number of data points
*# = the summation symbol
Based on the table, we can calculate the MAD as follows:
*X# = (80 + 50 + 50 + 75) / 4 = 63.75
*|X - X#| = |80 - 63.75|, |50 - 63.75|, |50 - 63.75|, |75 - 63.75| = 16.25, 13.75, 13.75, 11.25
*MAD = (16.25 + 13.75 + 13.75 + 11.25) / 4 = 6.25
Therefore, the correct answer is B.
References := 1 CPIM Part 2 Exam Content Manual, Domain 3: Plan and Manage Demand, Task 3.1:
Develop, validate, and review demand plans, p. 23.

In a lean environment, the batch-size decision for planning "A" items would be done by lot-for-lot (L4L).
L4L is an inventory management technique that orders exactly the quantity needed to meet the demand for each period. This minimizes the work in process, cycle time, and inventory holding costs. L4L is consistent with the lean principles of reducing batch sizes, eliminating waste, and responding to customer pull. The other options are not suitable for a lean environment, as they either order more than the demand (least total cost, min-max system, periodic order quantity) or incur more setup costs (least total cost, periodic order quantity).
References:
*[CPIM Part 2 - Section A - Topic 3 - Lean and Just-in-Time]
*Optimize Production Batch Sizes
*How to determine your Lot Size - Part 1

Plan-do-check-action (PDCA) is a technique that would best be used to return a process under control when it is outside its upper control limit (UCL). PDCA is a four-step cycle of continuous improvement that involves planning a change, implementing the change, checking the results, and acting on the findings. PDCA can help identify and eliminate the root causes of variation, improve the process performance, and prevent the recurrence of problems. PDCA is also known as the Deming cycle or the Shewhart cycle. Reference:
Managing Supply Chain Operations, Chapter 9: Quality Management, Section 9.3: Quality Improvement, Subsection 9.3.1: Plan-Do-Check-Act Cycle CPIM Exam Content Manual, Module 8: Quality, Technology and Continuous Improvement, Section 8.2: Continuous Improvement, Subsection 8.2.1: Continuous Improvement Concepts, Subsubsection 8.2.1.1: Plan-Do-Check-Act Cycle