Question

You are using an exponential smoothing model for forecasting. The running sum of the forecast error statistics (RSFE) is calculated each time a forecast is generated. You find the last RSFE to be 34. Originally, the forecasting model used was selected because of its relatively low MAD of 0.4. To determine when it is time to re-evaluate the usefulness of the exponential smoothing model, you compute tracking signals. Which of the following is the resulting tracking signal?A) 85B) 60C) 13.6D) 12.9E) 8

Answer 1

A)85

Explanation:

Calculation for the resulting tracking signal

Using this formula

Tracking signal= Last forecast error statistics (RSFE) /Low MAD (Mean Absolute Deviation)

Let plug in the formula

Tracking signal=34/0.4

Tracking signal=85

Therefore the resulting tracking signal will be 85