Nora Damus reviews her forecasting triumphs and failures as part of her annual report to the Chief Operating Officer. She notes that her monthly forecast for batteries has a mean forecast error of 20, and a mean absolute deviation of 20. Which of the following statements about her forecast is BEST?
A)Nora has miscalculated her mean forecast error.
B)Nora has miscalculated her mean absolute deviation.
C)Nora has a negative tracking signal.
D)Nora has a positive tracking signal.

Question

Quizplus · Accepted Answer

A positive tracking signal indicates that the forecast consistently overestimates the actual demand. Since the mean forecast error is positive (20), it suggests that the forecasts are, on average, higher than the actual values, leading to a positive tracking signal.

Nora Damus Reviews Her Forecasting Triumphs and Failures as Part