Strategic Forecasting Suite
The Strategic Forecasting Suite includes all
of the functionality of the Operational Forecasting Suite,
plus the ability to build Monte Carlo simulation
models.
What are Strategic Forecasts
Business forecasts can be divided into two very
distinct types: Operational and Strategic.
These types differ both in the methods used to prepare
the forecast and in the types of questions they are
designed to answer.
Operational Forecasts are used to
support routine business processes such as production
planning, inventory management, sales force evaluation,
etc. Using historical data about a key quantity such as
sales, you can apply time-series forecasting methods to
identify levels, trends, and seasonal patterns in the
data that can be used to predict future performance.
These techniques are very easy to apply and can produce
very accurate results. However, time-series forecasts are
based on the assumption that your business environment
and practices will not change substantially from their
current state.
Strategic Forecasts are used to
exercise and compare competing business plans. These
forecasts are fundamentally different from Operational
Forecasts in that you intend to change your business
practices, so extrapolating past performance will no
longer be a good predictor of future performance.
Strategic forecasts rely on modeling and simulation
techniques rather than statistical data analysis.
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Operational Forecasts
|
Strategic Forecasts
|
| Type |
Time-series forecasting |
Modeling and simulation |
| Based on |
Historical data |
Management insight |
| Methods |
Exponential smoothing
Statistical regression
Fourier analysis |
Monte Carlo simulation
Decision analysis
Stochastic optimization |
| Used for |
Production planning
Inventory management
Sales force evaluation |
Marketing strategy
Resource allocation
Business optimization |
Components
The Vanguard Strategic Forecasting Suite
is an integrated application including the following
Vanguard System™ components:
To compare this functionality to that of other Suites,
refer to the Product
Comparison Chart. For a detailed introduction to
Vanguard's forecasting products, refer to the Budgeting and
Forecasting solutions page.
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