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How to Forecast Accurately: 14 Forecasting Methods using Sales History Data and Linear Programming

How to forecast sales accurately? Try different forecast methods applying linear programming to sales history data. Try MM4XL Forecast Manager software tool.

What: Accurate short-term sales forecast and not only

Forecast Manager software tool of MM4XL software makes projections from any sort of historical data. We refer to historical sales data because short-term sales forecast works best with sales historical data. The Forecast Manager tool of MM4XL software is enriched with the power of linear optimization, which means reaching the best solution for every fitted curve. Each forecast method is run, in seconds, hundreds or even thousands of times, every time trying new parameters. The curve that best fits the sales data is shown in a succinct but detailed report rich in charts, coefficients, and indices that highlight all aspects relevant to the forecasting manager for taking decisions. Forecast Manager has been written according to currently-popular MBA textbooks. It is accurate, cost-effective, easy to learn, and intended for business decision-makers. Last but not least, all computations are shown by means of common Excel formulas: we opened the Black-Box for you. Although easy to use, Forecast manager makes available a comprehensive range of forecast methods and output reports, resulting in very accurate sales forecasts from sales history data. The built-in option for the analysis of special events is very useful to analyse the effect of occasional events such as discounts offered for your product or by competitors. These are the 14 forecasting methods. Each method can adapt to the trend in the data, to the seasonality pattern or to both: Forecast Method Seasonality Trend Exponential smoothing No No Moving average No No Linear trend No No Stationary data additive Yes No Stationary data multiplicative Yes No Brown linear exponential smoothing No Yes Holt double exponential smoothing No Yes Triple exponential smoothing No Yes Weighted moving average No Yes Double moving average No Yes Quadratic trend No Yes Holt-Winter additive seasonality Yes Yes Holt-Winter multiplicative seasonality Yes Yes Seasonal regression Yes Yes

When: Short-term sales forecast

Click to enlarge	Forecast Manager software is used for short-term sales forecasts. Often we are asked "How long is short-term?" Our answer is "It depends on the cycle length".
Click to enlarge	If, for instance you want to make a future forecast using 36 monthly data points, you work with 3 data cycles of length 12. Our rule of thumb for a reliable forecast is to project no further than 15% of the data points times the number of cycles. So, 12 times 15% is about 2 times 3, which suggests that with 36 data points available you should not project further than 6 data points.

Who: Forecast Manager for strategic decision-makers

The Forecast Manager tool is used by business decision-makers often supported by business analysts. Among our business decision-maker clients there are:

• General Managers and CEOs
• Business Directors
• Marketing Managers
• Sales Managers
• Business Analysts
• Marketing Analysts
• Advertising Managers
• Pricing Managers
• Quality Managers
• Product Portfolio Managers