Microsoft Excel Data Analysis and Business Modeling (Office 2021 and Microsoft 365), 7th Edition

Chapter 63

Making probability statements from forecasts

Questions answered in this chapter:

• On what basis do we evaluate forecasts?

• If a drug company forecasts that it will sell 60 million units of a drug next year, what is the chance that it will sell more than 65 million units of that drug next year?

Every day, we are inundated by forecasts. Here are some examples:

• The government predicts the GNP will grow by 4 percent during the next year.

• The Eli Lilly and Company marketing department predicts that during the next year, demand for a given drug will be 400,000,000 DOT (days of therapy).

• A Wall Street guru predicts the Dow Jones Industrial Average Index will go up 20 percent during the next 12 months.

• The bookmakers forecast that the Indiana ...