Which forecasting model are you, judgemental or scientific?
Practical business forecasting can be seen as a science and an art. It is a science in the sense that correct use of sophisticated statistical tools such as Forecast Pro will invariably improve your forecasting accuracy. And it is an art in the sense that empirical data seldom if ever can provide an unequivocal answer, so as a business you must choose between alternative relationships to select those equations that will provide the most accurate forecasts.
Is it true that there are no perfect forecasts; they always contain some percentage of error. While that may seem stating the obvious, it is nonetheless important to emphasize this fact at the outset. The point we are trying to make is that it is possible to minimize forecast error but not to pretend that it can be eliminated completely. To accomplish this goal, a variety of forecasting methods with forecasting software such as Forecast Pro, may be used. In many cases, forecasting methods can be complementary and not competitive.
The great part about forecasting is that forecasts can be used for many purposes. Even just predicting the direction of change is sufficient to justify a forecasting model. It should go without saying that a forecasting model that could accurately predict the movement of the stock market the next day – even without providing any information about how much it would rise or fall – would be extremely valuable and profitable.
There are many ways of forecasting, not all of which are based on rigorous statistical techniques. In some cases, just some informed judgment can provide the best forecasts. However, there is no rigorous way of testing how much informed judgments have boosted forecast accuracy, so we tend to stay clear of judgmental forecasts and stick to statistical, econometric methods and forecasting technology to construct forecasting accurate models and minimize forecast errors for your business.
For example, with Forecast Pro it is possible provide the historic data for the items you are forecasting and Forecast Pro does the rest. The built-in expert selection mode analyzes your data, selects the appropriate forecasting technique and calculates the forecasts using proven statistical methods. You can collaborate with colleagues to make adjustments to the statistical forecasts and easily document and save the changes. It you have yet to see forecast pro click here for a free Forecast Pro demo and 30 day trial of Forecast Pro for your business.