A method to measure how well predictions fit actual data is

Question

Quizplus · Accepted Answer

The tracking signal measures how well a forecast is predicting actual data. It calculates the ratio of the cumulative sum of forecast errors to the mean absolute deviation (MAD). A tracking signal value between -4 and 4 indicates an acceptable level of forecast accuracy, while values outside that range indicate a need for investigation into the forecasting process. Decomposition, smoothing, regression, and moving average are all methods for generating a forecast, but they do not directly measure how well the forecast fits actual data.

A Method to Measure How Well Predictions Fit Actual Data