The tracking signal is the
A) standard error of the estimate
B) absolute deviation of the last period's forecast
C) mean absolute deviation (MAD)
D) ratio of cumulative error/MAD
E) mean absolute percentage error (MAPE)

Question

Quizplus · Accepted Answer

The tracking signal is the ratio of cumulative error (the sum of forecast errors over a certain period of time) to the mean absolute deviation (MAD). It is used to determine if there is a systematic bias in the forecast. A tracking signal greater than 4 or less than -4 indicates that the forecast is consistently over- or underestimating actual demand, respectively. Therefore, option D is the correct answer.

The Tracking Signal Is the