The errors in a particular forecast are as follows: 4,-3,2,5,-1.What is the tracking signal of the forecast?
A)0.4286
B)2.3333
C)5
D)1.4
E)2.5

Question

Quizplus · Accepted Answer

The tracking signal (TS) is calculated by dividing the cumulative sum of forecast errors by the mean absolute deviation (MAD).

Cumulative Sum of Forecast Error (CSFE) = 4 + (-3) + 2 + 5 + (-1) = 7
Mean Absolute Deviation (MAD) = (|4| + |-3| + |2| + |5| + |-1|)/5 = 3

Therefore, TS = CSFE/MAD = 7/3 = 2.3333, which is closest to option B.

The Errors in a Particular Forecast Are as Follows: 4,-3,2,5,-1