Forecasting Statistically

Executive Summary A statistical forecast is a distinct way of creating a forecast. We cover what it is and why they are called statistical. Introduction What statistical forecasting is a common question. They are the most commonly automated way of creating a forecast and are the baseline forecast in most cases. However, even most people…

Executive Summary Understanding a what is a forecasting method is critical to understanding statistical forecasting. We cover how to differentiate a forecasting method from a model. Introduction The question of what is a forecasting method is a relatively common question around forecasting. For this article, we will limit our topic of statistical forecasts. See our…

Executive Summary We cover best-fit functionality in how it works and the implementation steps in best-fit. Why the best fit historical accuracy is lower than generally proposed. Video Introduction: How to Understand Best Fit Forecast Model Selection Text Introduction (Skip if You Watched the Video) Best fit forecasting is a procedure within most supply chain…

Executive Summary Why is a causal forecasting a missed opportunity? How to get the right data for causal economic forecasting? Introduction One of the missed opportunities in forecasting I have discussed in the past is using macroeconomic trends to adjust forecasts. This type of adjustment would be performed at the top-level of the hierarchy, and…

Executive Summary The jargon-heavy core statistical forecasting parameters known as “Alpha, Beta, and Gamma” could just as easily be called by the more descriptive names of “Base Factor, Trend Factor, and Seasonality Factor.”  Introduction The jargon-heavy core statistical forecasting parameters known as “Alpha, Beta, and Gamma” could just as easily be called by the more…

Executive Summary Causal forecasting is a method of forecasting based upon tying the forecast to a variable. Causal forecasting is little used in statistical forecasting. What Is Causal Forecasting? Causal forecasting is forecasting one value by another value. There are various forms of complexity concerning causal forecasting. However, the most simple mathematical explanation is the…

Executive Summary Forecast simulation can be used to test important items that allow for the forecasting application to be adjusted. Specific items make a forecasting application a good prototyping forecasting. Introduction to Forecast Simulation Rarely does the public or do people who work at companies find out about problem implementations. However, I run into a…

Executive Summary Forecast prototyping is performing forecast and supply testing. Prototyping is critical to understanding how to make changes to the forecasting and supply system. Companies make a significant mistake when they select one forecasting system and trust that everything in that system will work as advertised. Instead, forecasting should be prototyped in another competitive…

Executive Summary The statistical forecasting is typically combined with judgment methods produced by sales and marketing to arrive at a consensus forecast. We compare these different forecasting approaches. Introduction to Consensus Forecasting There are three categories of obtaining forecast information from different people who apply to supply chain forecasting: Consensus forecasting Manual overrides to statistical…