Wednesday, 29 July 2015

Forecasting, when modeling is not the only choice - Trend Types(4 of 5)

There are three different trend types and the closer the gap between the confidence lines the more confidence you can have in the result.  Setting thresholds also assists in gaining visibility into the trend impact. 

Normal Trend

Step Trend
This takes in to account a change in the business, which you are aware will be happening.

Including the step will allow you to see how much impact that change is going to have on the overall trend.
In this scenario it has little or no effect.
Average vs. Peak Trend
I am often asked the question do I need to look at the averages or do I look at the peaks? You can produce a chart like the one below which looks at both.
The red line in this example is the peak trend and the green line the average trend, this tells me that the peak trend moving forward is  not as significant as the average trend.
So when I start analyzing this environment I’ll choose to look at the averages rather than the peaks.
On Friday I'll take a look at Forecasting and Virtualization and summarize the series for you. In the meantime join our Community and get access to our on-demand webinars, papers and performance tips
Charles Johnson
Principal Consultant


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