A producer of picture frames uses a tracking signal with limits of ±4 to decide

Question

A producer of picture frames uses a tracking signal with limits of ±4 to decide whether a forecast should be reviewed.
Given historical information for the past four weeks, compute the tracking signal and decide whether the forecast should be reviewed.
The MAD for this item was computed as 2.

Weeks

Actual Sales

Forecast

Deviation

Cumulative Deviation

Tracking Signal

4

16

14

(For tracking signal: round your answers to 1 decimal place, no tolerance.)

Weeks

Actual Sales

Forecast

Deviation

Cumulative Deviation

Tracking Signal

6.0 3.0 1 12 11 2 14 13 3 14 14

4

16

14

Explanation / Answer

Here MAD=2

Tracking Signal

=deviation/MAD

Week Actual Sales Forecast Deviation Cumulative Deviation

Tracking Signal

=deviation/MAD

6 6/2=3 1 12 11 12-11=1 6+1=7 1/2=0.5 2 14 13 14-13=1 6+1+1=8 1/2=0.5 3 14 14 14-14=0 6+1+1+0=8 0/2=0.0 4 16 14 16-14=2 6+1+1+0+2=10 2/2=1.0

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