What is a tracking signal used for?
A) To identify trends in actual data
B) To identify seasonality in actual data
C) To identify the effect of business cycles on actual data
D) To compute the value of the smoothing constant, $\alpha$, for exponential smoothing
E) To identify forecast bias

Question

Quizplus · Accepted Answer

A tracking signal is used to identify forecast bias by measuring the difference between actual and forecasted values over time. If this difference consistently exceeds a certain limit, it indicates a bias in the forecasting method. It is not used to identify trends, seasonality, or the effect of business cycles. The smoothing constant for exponential smoothing is typically determined through trial and error or using a data-driven approach.

What Is a Tracking Signal Used For? A) to Identify α\alphaα

What Is a Tracking Signal Used For?
A) to Identify $\alpha$