Operations Management: An Integrated Approach, 5th Edition

FORECASTING SOFTWARE

Today much commercial forecasting is performed using computer software. Many software packages can be used for forecasting. Some can handle thousands of variables and manipulate huge databases. Others specialize in one forecasting model. Consequently, it may be difficult to select the right forecasting software. Most forecasting software packages fall into one of three categories: (1) spreadsheets, (2) statistics packages, and (3) specialty forecasting packages. In this section we look at the differences among these categories. Then we present some guidelines for selecting a software package for forecasting.

Spreadsheets

Spreadsheets, such as Microsoft Excel®, Quattro Pro®, and Lotus 1-2-3®, are prevalent in business, and most people are familiar with at least one of them. These packages provide basic forecast capability, such as simple exponential smoothing and regression. Also, simple forecasting programs can be written very quickly for most spreadsheet programs. However, the disadvantage of using spreadsheets for forecasting is that they do not have the capability for statistical analysis of forecast data. As we have seen, proper forecasting requires much data analysis. This involves analyzing the data for patterns, studying relationships among variables, monitoring forecast errors, and evaluating the performance of different forecasting models. Unfortunately, spreadsheets do not offer this capability as readily as packages designed specifically for forecasting. ...