Strategic Business Forecasting: Including Business Forecasting Tools and Applications

276 Pages·2009·23.88 MB·English

by  Jae K. Shim

f including Business Forecasting Tools
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Dr Jae K Shim - -'-.- -- - > -I ,- + ..-. .. .
Strategic Business Forecasting

FORECASTING
ln cluding Business Forecasting Tools
and Applications
Dr Jae K Shim
Professor of Business Administration, California State University, Long Beach
and
CEO, Delta Consulting Company
professional
publishing
O Global Professional Publishing 2009
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ISBN 978- 1-906403-47-8
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Contents
Preface xiii
Acknowledgments xiv
Part I Introduction
Chapter I Forecasting and Managerial Planning
Who Uses Forecasts?
Types of Forecasts
Sales Forecasts
Economic Forecasts
Financial Forecasts
Technological Forecasts
Forecasts for Supply Chain Management
Forecasting Methods
Selection of Forecasting Method
The Qualitative Approach
Executive Opinions
The Delphi Method
Sales- Force Polling
Consumer Surveys
A Word of Caution
Common Features and Assumptions Inherent in Forecasting
Steps in the Forecasting Process
Strategic Business Forecasting
Chapter 2 Forecasting, Budgeting, and Business Valuation
The Sales Budget
The Production Budget
The Direct Material Budget
The Direct Labor Budget
The Factory Overhead Budget
The Selling and Administration Budget
The Budgeted Income Statement
The Cash Budget
The Budgeted Balance Sheet
Company-Wide and Departmental Budgets
"What-If" Scenarios And Computer Simulation
Using an Electronic Spreadsheet to Develop a Budget Plan
Forecasting and business valuation
Conclusion
Part 2 Forecasting Methods
Chapter 3 Moving Averages and Smoothing Methods
Naive Models
Smoothing Techniques
Moving Averages
Exponential Smoothing
The Model
The Computer and Exponential Smoothing
Exponential Smoothing AGusted for Fend
Conclusion
Chapter 4 Regression Analysis
The Least-Squares Method
Use of Spreadsheet for Regression
A Word of Caution
Regression Statistics
1. Correlation coefficient (R) and coefficient of determination (RZ)
vi
Contents
2. Standard Error of the Estimate (5) and Prediction Confidence Interval
3. Standard Error of the Regression Coefficient (SJ and t-Statistic
Using Regression on Excel
Excel Regression Output
Conclusion
Chapter 5 Multiple Regression
Applications
The Model
Nonlinear Regression
Using Qualitative Factors - Dummy Variables
Weighted (or Discounted) Regression
Statistics to Look for in Multiple Regressions
t-statistics
(R2
R-Bar Squared ) and F-Statistic
Multicollinearity
Autocorrelation (Serial Correlation)
Checklists: How to Choose the Best Forecasting Equation
How to Eliminate Losers
How to Choose the Best Equation
Use of a Computer Statistical Package for Multiple Regression
Conclusion
Chapter 6 Time Series Analysis and Classical Decomposition
Trend Analysis
Linear Trend
Nonlinear Trend
Forecasting Using Decomposition of Time Series
Conclusion
Chapter 7 Forecasting with No Data
The A-T-A-R- Model
Growth Models
The Linear Model - Constant Change Growth
Strategic Business Forecasting
The Exponential Model - Constant Percentage Growth
Modified Exponential Growth
Logistic Growth
A Word of Caution
Checklists - Choosing the Right Growth Model
Chapter 8 lndirect Methods
Forecasting Sales with the Markov Model
lndirect Methods
Barometric Forecasting - Indexes of Economic Indicators
Input- Output Analyss
Market Survey Techniques
Econometric Forecasting
Conclusion
Chapter 9 107
Evaluation of Forecasts 107
Cost of Prediction Errors
Checklist
Measuring Accuracy of Forecasts
MAD, MSE, RMSE, andMAPE
The U Statistic and Grning Point Errors
Control of Forecasts
Packing Signals
Control Charts
Conclusion
Chapter I0 What is the Right Forecasting Tool and Software for You?1 15
Forecasting and Statistical Software 125
1. Forecast Pro 125
2. Easy Forecaster Plus 1a nd 11 125
3. Autobox 5.0 I26
4. DS FM (Demand Solutions Forecast Management) 126
5. Forecast @err Toolkit 126
viii
Contents
6. Demandworks DP
7. Roadmap Geneva Forecasting
8. SmartForecasts
9. E Views 6
I I. Sibyl/Runner
What is the Right Package for You?
Conclusion
Part 3 Applications
Chapter I I Sales and Revenue Forecasting
Dependent and Independent Demand
Purposes, Concepts and Methods of Forecasts
Basic Forecasting Methods
Sales Forecasting: A Combined Process
Can You Manage Demand?
Chapter 12 Forecasting the Economy
Barometric Forecasting
Econometric Models
Input-Output Analysis
Economic forecasting at AT&T
Opinion Polling
Economic Forecasting Services
Sources of General Economic Information: Aggregate Economic Data
Economic Report of the President
Federal Reserve Bulletin
Quarterly Chart Book and Annual Chart Book
The Report on Current Economic Conditions ("The Beige Book'?
Monthly Newsletters and Reviews Published by Federal Reserve Banks
US. Financial Data, Monetary Trends and National Economic Trends
Economic Indicators
Survey of Current Business, Weekly Business Statistics, and Business Conditions
Digest 151
ix