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Demand-Driven Forecasting: A Structured Approach to Forecasting

Demand-Driven Forecasting: A Structured Approach to Forecasting

Charles W. Chase

ISBN: 978-1-119-20361-2

Oct 2015

288 pages

Select type: O-Book


Praise for Demand-Driven Forecasting

A Structured Approach to Forecasting

"There are authors of advanced forecasting books who take an academic approach to explaining forecast modeling that focuses on the construction of arcane algorithms and mathematical proof that are not very useful for forecasting practitioners. Then, there are other authors who take a general approach to explaining demand planning, but gloss over technical content required of modern forecasters. Neither of these approaches is well-suited for helping business forecasters critically identify the best demand data sources, effectively apply appropriate statistical forecasting methods, and properly design efficient demand planning processes. In Demand-Driven Forecasting, Chase fills this void in the literature and provides the reader with concise explanations for advanced statistical methods and credible business advice for improving ways to predict demand for products and services. Whether you are an experienced professional forecasting manager, or a novice forecast analyst, you will find this book a valuable resource for your professional development."
—Daniel Kiely, Senior Manager, Epidemiology, Forecasting & Analytics, Celgene Corporation

"Charlie Chase has given forecasters a clear, responsible approach for ending the timeless tug of war between the need for 'forecast rigor' and the call for greater inclusion of 'client judgment.' By advancing the use of 'domain knowledge' and hypothesis testing to enrich base-case forecasts, he has empowered professional forecasters to step up and impact their companies' business results favorably and profoundly, all the while enhancing the organizational stature of forecasters broadly."
—Bob Woodard, Vice President, Global Consumer and Customer Insights, Campbell Soup Company




Chapter 1 Demystifying Forecasting: Myths versus Reality.

Data Collection, Storage, and Processing Reality.

“Art of Forecasting” Myth.

End-Cap Display Dilemma.

Reality of Judgmental Overrides.

Oven Cleaner Connection.

More Is Not Necessarily Better.

Reality of Unconstrained Forecasts, Constrained Forecasts, and Plans.

Northeast Regional Sales Equation.

“Hold and Roll” Myth.

The Plan That Wasn't Good Enough.



Chapter 2 What Is Demand-Driven Forecasting?

“Do You Want Fries with That?”

Definition of Demand-Driven Forecasting.

What Is Demand Sensing?

Data Requirements.

Role of Sales and Marketing.

What Is Demand Shaping?

Integrating Demand-Driven Forecasting into the Consensus Forecasting Process.

Importance of Business Intelligence Portals/Dashboards.

Role of the Finance Department.

Demand-Driven Forecasting Process Flow Model.

Key Process Participants.

Benefits of Demand-Driven Forecasting.


Chapter 3 Overview of Forecasting Methods.

Underlying Methodology.

Different Categories of Methods.

How Predictable Is the Future?

Some Causes of Forecast Error.

Segmenting Your Products to Choose the Appropriate Forecasting Method.


Chapter 4 Measuring Forecast Performance.

We Overachieved Our Forecast, So Let’s Party!

Purposes for Measuring Forecasting Performance

Standard Statistical Error Terms.

Specific Measures of Forecast Error.

Out-of-Sample Measurement.

Forecast Value Added.


Chapter 5 Quantitative Forecasting Methods Using Time Series Data

Understanding the Model-Fitting Process.

Introduction to Quantitative Time Series Methods.

Quantitative Time Series Methods.

Moving Averaging.

Exponential Smoothing.

Single Exponential Smoothing.

Holt's Two-Parameter Method.

Holt's-Winters' Method.

Winters' Additive Seasonality.


Chapter 6 Quantitative Forecasting Methods Using Causal Data.

Regression Methods.

Simple Regression.

Multiple Regression.

Box-Jenkins Approach to ARIMA Models.

Box-Jenkins Overview.

Extending ARIMA Models to Include Explanatory Variables.

Unobserved Component Models.


Chapter 7 Weighted Combined Forecasting Methods.

What Is Weighted Combined Forecasting?

Developing a Variance Weighted Combined Forecast.


Chapter 8 Sensing, Shaping, and Linking Demand to Supply: A Case Study Using MTCA.

Linking Demand to Supply Using Multi-tiered Causal Analysis.

Case Study: The Carbonated Soft Drink Story.


Appendix 8A Consumer Packaged Goods Terminology.

Appendix 8B. Adstock Transformations for Advertising GRP/TRPs.

Chapter 9 Strategic Value Assessment: Assessing the Readiness of Your Demand Forecasting Process.

Strategic Value Assessment Framework.

Strategic Value Assessment Process.

A SVA Case Study: XYZ Company.


Suggested Reading.