Supply Chains: A Manager's Guide

Projecting Trends

For a product with a known sales history, the best guide to future sales is past performance. Using the techniques of time-series analysis, you can apply standard formulas to analyze a sales history, extract information about recurring patterns, and use those patterns to project sales into the future. To see how this works, look at the upper panel in Figure 10.1, which plots monthly sales figures for a particular product over the past three years. There are clearly patterns here: There is an overall increase in sales from one year to the next, but the sales appear to be relatively flat within each year, and the amount of variability from one month to the next appears to be roughly constant over time. The time-series analysis ...