Forecast New Products Through Analogies

This article is based on the written Forecast 101 by Eric Stellwagen Vice President and co-founder of Bussiness Forecast System, House producer of Forecast Pro. The article explains the conceptual basis of the approach to generate a forecast by analogies and how to apply this method. The concept behind a forecast by analogies refers to the similarity that can be between the variable to predict and an expected pattern of demand, in a scenario of business this technique would be used in those products that despite being new in the company are not completely new to the market is analyzed from the information and patterns of products with similar characteristics. A critical step in the process is the construction of the pattern of demand which will define the way in which the forecast will behave. Build this pattern of demand probably will need attend a product whose demand is similar to that of the new product. When the demand pattern is created to be used in the product usually takes the relative percentage of each of the periods rather than take the analogous product, otherwise unitary demand demand for the new product would be exactly equal, which is not very likely to happen.

Two examples were used to illustrate the technique: the first one for a new product which has no historical information in the second case a product with very short history. The existing product is shown in the figure on which to perform the analogy in this case used the relative percentage and cumulative relative percentage. ion. Forecast through analogies without historical demand. The first step in this scenario is to estimate the total demand for a specific horizon, for example a year. This estimate can be made from qualitative methods such as market research or the delphi method. Once demand has been estimated for the period total specific specific percentages of the analogous series are used to assign to each period the percentage specific estimated total demand, the result will be a curve similar to the analogous series but with one scale consistent with the demand for the new product.