Certified Supply Chain Professional (CSCP) Practice Exam

What action should be taken if the tracking signal falls outside of the -4 to +4 range?

1. Ignore the data

2. Review the forecasting method to find something more suitable

3. Continue using the existing method

4. Report the results

The correct answer is: Review the forecasting method to find something more suitable

When the tracking signal falls outside of the -4 to +4 range, it indicates that the forecasting method being used is likely producing biased predictions. The tracking signal is a measure of the forecast's accuracy, and when it strays beyond this threshold, it suggests that the forecast consistently overestimates or underestimates the actual outcomes. The appropriate action in such a scenario is to review the forecasting method to identify a potentially more suitable approach. This evaluation may involve analyzing the historical data for patterns, assessing the underlying assumptions of the current method, or exploring alternative methodologies that could provide more accurate predictions. The goal is to improve the overall forecasting performance and ensure that future forecasts align more closely with actual results. Other options do not appropriately address the concern raised by the tracking signal. Ignoring the data would lead to continued inaccuracies, continuing with the existing method may further exacerbate forecasting errors, and merely reporting the results does not act on the underlying issue of forecast bias. Therefore, assessing and revising the forecasting method is the most logical and effective step to take.