Hard copy is hard copy.You can read it , experiment it , prepare notes and lot. So why read online samples when you can own a full copy for less than 4$ .Email [email protected]  to buy hard copy of the same. If you think the excel book can be improved please email the author at [email protected]
 

Home

Theory about forecasting

We will run through some basic forecasting concepts before we dive in to EXCEL forecasting. These concepts are essential when we do forecasting.

Forecasting means trying to visualize future prospects using current and history data. Any forecasting has two things one is the dependent variable and other is independent variable. Dependent variable are what we want to forecast and independent is on which basis we will be forecasting. For instance consider the below figure 'Dependent and Independent' where we want to predict sales (dependent variable) for a given marketing expenditure (Independent Variable). Some of the conclusions we can make from the figure is:-

• Independent variables are those which we want to predict and dependent at those on the basis which we predict.
• Dependent variable should always go to the Y-Axis input and independent variable should go on X-axis. This point is very essential when we start using EXCEL we should always give independent variable input in Y-axis.

Figure: - Dependent and Independent

Forecasting is all about finding the relationship between dependent and independent variable. There are many scientific ways of finding the relationship one of them is using ‘Regression Analysis’. Regression analysis is a technique which describes relationship between two variables. There are different types of regression analysis available depending on the data:-

• If we predict that the data is growing in steady fashion we can use linear regression.
• If we want to forecast data which is growing aggressively we can use exponential, power and logarithmic regression.
• If the data is fluctuating we can use polynomial regression.
• If we want estimate on basis of average values we can use moving average regression.

Figure: - Regression types

The above points are true if we have to find relationship and forecast on the basis of one or more set of data. Let’s say if you want to find out how the sales performed on the basis of marketing expenditure and quality of product. That means you have multiple independent variable. For this scenario we can use multiple regression fundamental.

So let’s summarize what we have understood regarding forecasting:-

• Forecasting helps us to find relationship between dependent and independent variable.
• Regression comes in different types like linear, power, exponential, polynomial, average and logarithmic regression.
• If we have more than one dependent and independent variable we need to use multiple regression fundamental.

Hard copy is hard copy.You can read it , experiment it , prepare notes and lot. So why read online samples when you can own a full copy for less than 4$ .Email [email protected]  to buy hard copy of the same. If you think the excel book can be improved please email the author at [email protected]
 

Home