Question

The errors in a particular forecast are as follows: 4, -3, 2, 5, -1. What is the tracking signal of the forecast? Select one: A. 2.5 B. 5 C. 2.3333 D. 0.4286 E. 1.4

Answer 1

The tracking signal is a measure of the accuracy of a forecast. For the given errors of 4, -3, 2, 5, -1, it is calculated as the sum of these errors divided by the mean absolute deviation, resulting in a tracking signal of approximately 2.3333.

Step-by-step explanation:

The tracking signal of a forecast is a measurement that indicates how well the forecast is predicting actual values. It is calculated by taking the cumulative sum of forecast errors and dividing it by the mean absolute deviation (MAD). The formula for tracking signal is TS = (Sum of forecast errors) / (MAD).

To calculate the tracking signal for the given forecast errors of 4, -3, 2, 5, -1, follow these steps:

1. Sum the forecast errors: 4 + (-3) + 2 + 5 + (-1) = 7.
2. Calculate the mean absolute deviation (MAD): |4| + |-3| + |2| + |5| + |-1| = 4 + 3 + 2 + 5 + 1 = 15, then divide by the number of errors, which is 5, to get MAD = 15 / 5 = 3.
3. Divide the sum of forecast errors by the MAD to get the tracking signal: TS = 7 / 3 ≈ 2.3333.

Therefore, the correct answer is C. 2.3333.