company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35.Which of the following is the company's tracking signal?
A)Cannot be calculated based on this information
B)About 14.3
C)More than 35
D)Exactly 35
E)About 0.07

Question

Quizplus · Accepted Answer

Tracking signal is calculated by dividing the running sum of forecast errors by the mean absolute deviation.

Tracking Signal = Running Sum of Forecast Errors / Mean Absolute Deviation

Given, Running Sum of Forecast Errors = 500 and Mean Absolute Deviation = 35.

Therefore, Tracking Signal = 500/35 ≈ 14.3

Hence, the answer is B) About 14.3.

Company Has Calculated Its Running Sum of Forecast Errors to Be