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The Business Forecasting Deal: Exposing Myths, Eliminating Bad Practices, Providing Practical Solutions (Wiley and SAS Business Series Book 27) Kindle Edition
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From the Inside Flap
Exposing Myths, Eliminating Bad Practices, Providing Practical Solutions
Business forecasting is the ultimate no-win game. You're almost always wrong--except on those rare, random occasions where actual sales come in exactly on forecast--and you get beat up routinely for your "lousy forecasts." Against this framework, The Business Forecasting Deal turns forecasting on its head. Instead of focusing solely on statistical modeling and forecast accuracy--accuracy being largely determined by the nature of the demand you are trying to forecast--Michael Gilliland turns your attention to forecasting process efficiency and effectiveness. His unique perspective, utilizing the emerging method of Forecast Value Added (FVA) analysis, shows how organizations can meaningfully improve their performance by eliminating the "worst practices" that now sabotage and confound their forecasting efforts.
While predicting the future is a very difficult thing, there is no shortage of articles, books, consultants, and even software vendors willing to tell you (or sell you) their version of forecasting best practices. However, many of these purported "best practices" do not work--they fail to make the forecast any better. Through FVA analysis--a method that has been employed at several major corporations including Intel, AstraZeneca, Cisco, and Yokohama Tire (Canada)--The Business Forecasting Deal shows how to identify the waste and inefficiencies in the typical forecasting process. By eliminating those (surprisingly common) practices that make the forecast worse, FVA analysis is helping companies get better forecasts with less effort and less cost.
Written in a nontechnical style, this book provides practical solutions to a wide variety of business forecasting problems. It illustrates a new way to think about business forecasting in the context of uncertainty, randomness, and process performance, all within the internal political arena in which real-life forecasting is conducted. While there is no magic formula to guarantee perfect forecasts, this book will change your perspective--and improve your success--in dealing with the problems of business forecasting.--This text refers to the hardcover edition.
About the Author
MICHAEL GILLILAND is Product Marketing Manager at SAS Institute and has worked in consu-mer products forecasting for more than twenty years. Prior to joining SAS in 2004, Mike held forecasting management positions in the food, electronics, and apparel industries and served as a consultant. He is a frequent speaker at industry events, has published articles in Supply Chain Management Review, Journal of Business Forecasting, Foresight, and APICS magazine, and was a columnist on "Worst Practices in Business Forecasting" for Supply Chain Forecasting Digest. Mike holds a BA in philosophy from Michigan State University, and master's degrees in philosophy and mathematical sciences from Johns Hopkins University. Follow his blog, The Business Forecasting Deal, at blogs.sas.com/forecasting. --This text refers to the hardcover edition.
- ASIN : B003NE61MQ
- Publisher : Wiley; 1st edition (May 13, 2010)
- Publication date : May 13, 2010
- Language : English
- File size : 3320 KB
- Text-to-Speech : Enabled
- Screen Reader : Supported
- Enhanced typesetting : Enabled
- X-Ray : Not Enabled
- Word Wise : Enabled
- Print length : 274 pages
- Page numbers source ISBN : 0470574437
- Lending : Enabled
- Best Sellers Rank: #1,404,974 in Kindle Store (See Top 100 in Kindle Store)
- Customer Reviews:
Top reviews from the United States
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Gilliland’s book, targeted to business users, is a complement to other technical books such as Forecasting: Principles and Practices (Hyndman and Athanasopoulos) and practical ones such as Future Ready (Morlidge and Player). Although practical, The Business Forecasting Deal discusses very specific issues in forecasting such as worst practices and forecasting without history.
The main concept of the book is the so called Forecast Value Added (FVA). The point of Gilliland is that forecasts are useful only when they add something to a naive prediction (last value, average, etc.). If your forecast isn’t better than a naive one, why spend time and resources on it? Common measures such as MAPE (Mean Absolute Percentage Error) aren’t enough as they don’t provide an indication of how much better/worse than a naive forecast you are.
Gilliland always mentions MAPE as a limited way of measuring forecasting accuracy. However, practitioners should know a better way of measuring accuracy: Mean Absolute Scaled Error (MASE). Advised by Hyndman, it implicitly includes a naive forecast within the equation to create a useful accuracy metric. For me, it looks like FVA is another name for existing metrics such as MASE. Hopefully, the FVA is more than just an equation. It’s a full methodology allowing to reduce inefficiencies in the overall forecasting process. The book concludes with a large Q&A section which is often repetitive of the book content.
The Business Forecasting Deal is an excellent book containing plenty of sound advices for forecasting practitioners. Gilliland did an excellent job in summarizing challenges and issues in forecasting, and providing related solutions. In complement to an introductory business book and a technical one, it will allow you to integrate forecasting within your company and gain the best of it.
This book is by far and away my favorite. I've been through it a couple of times. It's very practical and honest (not much vendor or consultant speak).
If you want good understanding of Demand Planning, how to do it as efficiently as possible and what you can expect from your systems, you should read this book.
Gilliland's greatest contribution is probably the observation that the accuracy of the forecast is largely dictated by the nature of the sales pattern. The best way to improve the forecast accuracy is to make the sales pattern more predictable - or more correctly stop making it unpredictable through peverse incentives and practices.
The FVA Forecast Value Added measure is also a really good common-sense measure.
I felt that he lost his way a little in the section on Organizational realignment but otherwise the book is a great read for any forecasting practitioner