APICS CPIM – Basics of Supply Chain Management — Question 3

A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225.
Calculate the tracking signal for this product's forecast.

Answer options

• A. 6
• B. 7.5
• C. 45
• D. 75

Correct answer: A

Explanation

The tracking signal is calculated by taking the cumulative forecast error and dividing it by the mean absolute deviation. In this case, the cumulative forecast error results in a value that leads to a tracking signal of 6, making option A correct. The other options do not accurately reflect the calculations based on the provided data.