Statistical Tableau

Chapter 10. Forecasting in Tableau

Forecasting is one of the best models to use in a business environment. There are many reasons why forecasting is popular, but the main reason is familiarity. You can see forecasts everywhere: in finance, banking, economics, healthcare, retail sales, supply chain, and much more.

The term forecasting itself can be rather vague from a statistical point of view because there are a lot of methods that can be used to forecast. In Tableau, when you use the built-in forecast model from the Analytics pane, it uses a method called exponential smoothing. Throughout this chapter, you see the term forecasting used interchangeably with exponential smoothing.

In this chapter, you will be introduced to exponential smoothing, its several methods of implementation, and the robustness of the model, and you will learn how to use it effectively in Tableau.

What Is Exponential Smoothing?

Exponential smoothing is a versatile technique that can be applied to various use cases across different industries. Here are five common use cases for exponential smoothing forecasting:

Retail demand forecasting

Retailers often use exponential smoothing to predict future demand for products. By analyzing historical sales data, they can forecast product sales for different time periods, helping with inventory management, supply chain optimization, and stock replenishment strategies.

Financial forecasting

Financial institutions and analysts use exponential smoothing to predict ...