Business Analysis with Microsoft® Excel, Second Edition

Summary

Forecasting can be trappy. To create a good forecast, you need a well-measured, well-defined baseline of data. You should use the suggestions made in this chapter to choose the most appropriate approach (moving average, regression, smoothing, or Box-Jenkins). At times, your baseline might not suggest an appropriate method, and you might need to wait for a longer baseline before you can be confident of your forecast.

Even if you feel you've done everything right, conditions have a way of changing unexpectedly—making your careful forecast look like a blind guess. Be sure to regard your forecasts with a healthy dose of skepticism. The more variables you have to work with, the more ways there are to view the future. Changes in one forecast ...