Question

Month	Actual Sales	Forecast Sales
January	8	10
February	11	10
March	12	10
April	14	10

-Compute the RSFE, MAD and tracking signals for months January to April?

Answer 1

Question : Compute the RSFE, MAD and tracking signals for months January to April?

RSFE : Running Sum of Forecast Error = Cumulative Sum of Forecast Error , i.e RFSE for January = Forecast error of January , RFSE for Feb = Forecast Error of January +Forecast Error of Feb , RFSE for March = Forecast Error of jan + Forecast error of Feb +Forecast error of March and so on.

MAD : Mean Absolute Deviation = Average of Absolute Deviation over months i.e MAD for January= Absolue deviation(Forecast error) of Jan/1 , MAD till Feb = Average of Absolute deviation for Jan and Absolute deviation of Feb, MAD till MArch = Average of Absolute deviation for Jan , Absolute deviation of Feb and Absolute deviation of March and so on.

Tracking Signal = RSFE/MAD

Forecast Error = Actual Sales for a month - Forecast for the month

Absolute Deviation=Absolute value of Forecast Error = Abs(Forecast Error)

CaLCULATION TABLE of excel is given below.

Month	Actual Sales	Forecast Sales	Forecast Error et=Actual-Forecast	RSFE= Cumulative Value of Forecast Error	Absolute Value of Forecast Error = abs(Forecast Error)	MAD= Cumulative Averaga of Absolute error	Tracking Signal=RSFE/MAD
January	8	10	-2	-2	2	2	-1.00
February	11	10	1	-1	1	1.5	-0.67
March	12	10	2	1	2	1.67	0.60
April	14	10	4	5	4	2.25	2.22