When all the forecast errors plotted on a control chart are either all positive,or all negative,this shows that the forecasting technique is performing adequately.

Question

Quizplus · Accepted Answer

All forecast errors either being all positive or all negative means that the forecasting technique is biased and not performing adequately. Adequate performance would mean that the forecast errors are randomly distributed around zero on the control chart.

When All the Forecast Errors Plotted on a Control Chart