Forecasting: The Basic Issues
IN THIS CHAPTER
Knowing why you need to forecast
Understanding the language of forecasting
Seeing what Excel can do for you
Unless you really enjoy playing with numbers, you need a good reason to bother with forecasting sales. In this chapter, I tell you some of the business reasons to forecast, beyond the fact that your Vice President of Sales makes you do it.
Like all specialties, forecasting uses terms that are unfamiliar to those who haven’t yet been inducted into the secret society. This chapter introduces you to some of the important sales forecasting terminology.
If you’re going to make a credible forecast, you need access to an archive of historical data that isn’t necessarily easy to access. You’ll often find it right there in an Excel workbook, but sometimes it isn’t there; instead, it’s in your company’s accounting database, and someone will have to exhume it. In this chapter, you see some of the reasons to put yourself or your assistant through that task.
Excel offers several methods of forecasting. Each method works best — and some work only — if you set up a baseline using what Excel terms a table. Depending on the method you choose, that table may occupy only one column, or two (or more) columns. This chapter gives you an overview of those forecasting methods, along with a brief explanation of why you might use just one column of data for your baseline, or two or more columns, depending on your choice of forecasting method. ...