The Business Forecasting Deal: Exposing Myths, Eliminating Bad Practices, Providing Practical Solutions

by Michael Gilliland

• ISBN13: 9780470769645
• ISBN10: 0470769645
• Format: eBook
• Copyright: 2010-05-01
• Publisher: Wiley

Summary

Practical-nontechnical-solutions to the problems of business forecastingWritten in a nontechnical style, this book provides practical solutions to common business forecasting problems, showing you how to think about business forecasting in the context of uncertainty, randomness and process performance. Addresses the philosophical foundations of forecasting Raises awareness of fundamental issues usually overlooked in pursuit of the perfect forecast Introduces a new way to think about business forecasting, focusing on process efficiency and the elimination of worst practices Provides practical approaches for the non-statistical problems forecasters face Illustrates Forecast Value Added (FVA) Analysis for identifying waste in the forecasting processCouched in the context of uncertainty, randomness, and process performance, this book offers new, innovative ideas for resolving your business forecasting problems.

Table of Contents

Foreword

Foreword

Acknowledgments

Prologue

Fundamental Issues in Business Forecasting

The Problem of Induction

The Realities of Business Forecasting

The Contest

What Is Demand?

Constrained Forecast

Demand Volatility

Inherent Volatility and Artificial Volatility

Evils of Volatility

Evaluating Forecast Performance

Embarking on Improvement

Notes

Worst Practices in Business Forecasting: Part 1

Worst Practices in the Mechanics of Forecasting

Model "Overfi tting" and "Pick-Best" Selection

Confusing Model Fit with Forecast Accuracy

Accuracy Expectations and Performance Goals

Failure to Use a Naïve Model or Assess Forecast Value Added

Forecasting Hierarchies

Outlier Handling

Notes

Worst Practices in Business Forecasting: Part 2

Worst Practices in the Process and Practices of Forecasting

Politics of Forecasting

Blaming the Forecast

Adding Variation to Demand

Evangelical Forecasting

Overinvesting in the Forecasting Function

Forecasting Performance Measurement and Reporting

Forecasting Software Selection

Editorial Comment on Forecasting Practices

Notes

Forecast Value Added Analysis

What Is Forecast Value Added?

The Naïve Forecast

Why Is FVA Important?

FVA Analysis: Step-by-Step

Further Application of FVA Analysis

Case Studies

Summary: The Lean Approach to Forecasting

Notes

Forecasting without History

Typical New Product Forecasting Situations

New Product Forecasting by Structured Analogy

Organizational Realignment

Summary

Notes

Alternative Approaches to the Problems of Business Forecasting

Statistical Approach

Collaborative Approach

Supply Chain Engineering Approach

Pruning Approach

Summary

Notes

Implementing a Forecasting Solution

Why Do Forecasting Implementations Fail?

Preproject Assessment

Requesting Information or Proposals

Evaluating Software Vendors

Warning Signs of Failure

Notes

Practical First Steps

Recognize the Volatility versus Accuracy Relationship

Determine Inherent and Artificial Volatility

Understand What Accuracy Is Reasonable to Expect

Use Forecast Value Added Analysis to Eliminate Wasted Efforts

Utilize Meaningful Performance Metrics and Reporting

Eliminate Worst Practices

Consult Forecasting Resources

Notes

What Management Must Know About Forecasting

Forecasting Is a Huge Waste of Management Time

Accuracy Is Determined More by the Nature of the Behavior Being Forecast than by the Specific Method Being Used to Forecast It

Organizational Policies and Politics Can Have a Significant Impact on Forecasting Effectiveness

You May Not Control the Accuracy Achieved, But You Can Control the Process Used and the Resources You Invest

The Surest Way to Get a Better Forecast Is to Make the Demand Forecastable

Minimize the Organization's Reliance on Forecasting

Before Investing in a New System or Process, Put It to the Test

Notes

Epilogue

Glossary

Appendix Forecasting FAQs

Accuracy Expectations

Performance Benchmarks

Performance Measurement and Reporting

The Naïve Forecast

Forecast Value Added Analysis

Forecast Modeling

Politics and Practices of Forecasting

Demand Volatility

Forecasting Process

Judgment

Forecasting Organization

Low Volume/Intermittent Demand

New Product Forecasting

Forecasting Hierarchy

Software Selection

Index

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