You Are Using an Exponential Smoothing Model for Forecasting

question 26

Multiple Choice

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) 85
• B) 60
• C) 13.6
• D) 12.9
• E) 8

---

Definitions:

Monitoring Performance

The process of continually reviewing and assessing the work performance of employees.

Incentive-Pay Plans

Compensation strategies designed to motivate employees by tying a portion of their pay directly to their performance or achievements.

Scanlon Plan

A type of gainsharing program that incentivizes employees to improve productivity through teamwork and sharing the cost savings.

Balanced Scorecard

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align daily work with strategy, and prioritize projects, products, and services.