Forecast Pro Batch Edition for Windows

Robust statistical interactive forecasting for Windows-based PCs

From APICS: The Performance Advantage, July 1996

Interest in forecasting packages is on the upswing for several reasons: The number of procedures for generating forecasts is increasing, the packages are becoming easier to use, and faster, cheaper computing power and storage capability allows users to tackle larger data sets and get the results back faster than ever before. Finally, as lead times shorten (because of time-based competition and Just-in-Time practices), the general accuracy of the result forecasts is increasing.

In this month's column, guest reviewer Rex Sprietsma examines Forecast Pro for Windows Batch Edition, from Business Forecast Systems, Inc.

-- Steven Melnyk, Software Review Editor

By Rex Sprietsma

Forecast Pro Batch for Windows is a fairly sophisticated software package that facilitates the forecasting of hundreds, even thousands, of items automatically by incorporating a variety of statistical methods, including moving average, exponential smoothing, Box-Jenkins models, events models, multiple-level models and Croston's intermittent demand model. The first three are most frequently used to capture and extrapolate patterns found in historical data. Event models are used to capture responses to promotions and other unusual events, while Croston's model is used to forecast items where the demand is often zero. Finally, multiple-level models are used to organize the data into hierarchies and exploit relationships between the various levels.

Augmenting these various methods is a built-in expert system that helps in selecting the most appropriate forecasting technique for each variable or individual item. This expert system works by applying a combination of rule-based logic and testing to each item to be forecast. This package is particularly well suited to the batch processing requirements often found in corporate and manufacturing environments. Some very nice features make it a versatile forecasting tool for users with varying levels of expertise. It allows the user to manually select different forecast models, make individual forecast adjustments, and perform data experimentation.

Product performance:

This review is based on the writer's experience with the software at Babson Bros. Co., which began using the DOS version of Forecast Pro Batch program back in 1986. Our primary purpose at that time was to find a cost-effective program to create a 12-month forecast for each of about 4,000 service parts, every month, which could be used by the planners and buyers in making purchasing decisions.

Performance was tested using a Unisys MDP 5605 equipped with a Pentium 66 MHz chip and 32 MB RAM. The software was also evaluated using a Unisys 486DX with 16 MB RAM. The program ran well on both, and obviously the number crunching is performed in less time as the computer processor speed is increased. A run of 10,000 monthly time series with three years of history took 74 minutes to forecast on a 486/66. The same run took seven minutes on a Pentium/133.

Overall, I have been pleased with the performance of this program. If possible, I highly recommend attending one of the seminars offered by BFS. They are informative and provide a sound base of understanding for the use and capabilities of the forecasting software package.

Documentation

Eric Stellwagen and Robert Goodrich, authors of the manual, have done a nice job in explaining how to set the program up on a PC, the application and use of the program, and the theory behind the statistical models, diagnostics and methodology used in Forecast Pro Batch.

The manual is divided into three parts. Part 1 covers system requirements and product support, the installation procedure and an overview of forecasting. Part 2 includes a series of six lessons that demonstrate basic and key features of the program. Part 3 includes references and appendixes, and covers the selection of an appropriate data format, setting up a forecast script, a complete reference of the menus, options and commands, and finally a detailed statistical reference, which may prove a bit challenging for non-statisticians. Fortunately, it is not necessary to understand the statistical theory to use this software effectively.

The Forecast Pro Batch manual includes a glossary, bibliography and index. In addition, ease of use is enhanced through the use of a graphical user interface with pull-down menus, a tool bar with icons for commonly performed tasks (define the script, read in the data, generate the forecast, adjust the forecast, save the result, and so on) and a complete, context-sensitive help system.

Technical support

My experience with technical support has been very positive. In dealing with forecasting software, many times the data set being used is the source of the problem, so in some cases it is easier for BFS to diagnose a problem by trying to replicate the error on their end. While this may have required a several day turn-around a few years ago, it can be performed much more quickly today by sending data set files via the modem or the Internet.

Business Forecast Systems maintains a support staff that is trained in the use of the software and also in statistical forecasting. This enables them to respond quickly and efficiently to both operational and statistical questions. Support is available by phone, fax, mail and over the Internet.

Best features

The software boasts many fine features. I'll note three of my favorites. First is its built-in expert system that automatically matches the best statistical forecasting technique with the historical data set of each variable to come up with a forecast. This software looks for data properties that lead to a specific technique and then, if the results are ambiguous, try the remaining viable techniques and measure their performance. The objective of this expert system is to pick the optimal technique.

Second among the noteworthy features is the ability to view graphically the historical data and forecast and the statistical detail provided. Third, is the flexibility built into many aspects of this program, from manual forecast selection override and setting the forecast horizon to creating forecast scripts and building event models.

Suggested improvements

Although the number of variables this program can forecast is unlimited, if you want to make manual adjustments to the forecast of specific variables and then view the results on a graph, it is necessary to limit the size of the variables in a file to 1,024 or less. In practice, it makes sense anyway, because it takes time to step through each graph. If you are completely satisfied with the automated forecast output and do not have to make manual adjustments, it is possible to forecast files with a larger number of variables. I still prefer to use one input data file and create one forecast output file. When necessary, we split the historical data into four or five separate files and forecast each separately, so that adjustments can be made to an individual forecast. Another feature I would like to see is the ability to freeze a forecast, which would prevent portions of a forecast from being overwritten.

Rex Sprietsma is the market research manager at Babson Bros. Co., Naperville, Ill., a manufacturer and distributor of dairy farm equipment, chemicals, and supplies. He has an MBA from The University of Illinois at Chicago.

Product Summary

Forecast Pro Batch Edition for Windows

Type of program: Statistical interactive forecasting

Vendor: Business Forecast Systems 68 Leonard Street Belmont, MA 02178 Phone:(617) 484-5050 Fax:(617) 484-9219

Contact: Eric A. Stellwagen  www.forecastpro.com

Cost:$4,995 (30-day money back guarantee).

Operating environment:Requires at least 386 processor, Windows 3.1, 8 MB RAM, 2 MB disk space, math co-processor recommended. Other environments supported include DOS, Windows 3.1, Windows 95, Windows NT, OS/2, and UNIX. Forecast Pro Batch versions for these environments differ substantially from the version for Windows. Contact BFS for more specific information.

Contents of software:One 203-page manual, one 3.5-inch diskette

Support policy:One year of unlimited support included in cost of the program. A charge of $499 per year, after first year, includes all upgrades.

Training:BFS conducts a series of three-day seminars each year at various locations, at a cost of $1,095 per person ($995 each for two or more). BFS also offers on-site training on a consulting basis.

Demo available:Yes, more of a slide show than a working version. Demo disks are available by mail or files can be downloaded directly from the Internet.

Vendor Comments

We thank Rex Sprietsma for his review of Forecast Pro Batch for Windows and for his service as a beta tester of the product. We continually strive to improve our product line and are indebted to our many users for their guidance and suggestions.

The review focused on forecasting as a stand-alone process. We would like to point out that forecasting is often an important part of a larger planning process. Many Forecast Pro Batch users integrate the product with their production planning, demand management or inventory control system. To facilitate this type of integration, Forecast Pro Batch accepts data from many sources, including ASCII files, spreadsheets and relational databases (via ODBC). It also allows users to customize their output and to drive the program from the command line.

The reviewer chose three features to highlight. We would like to discuss two additional features that make Forecast Pro Batch a unique product. The first is its ability to organize data into hierarchies and reconcile the forecasts in various ways. For example, total sales could be broken down into product lines, products and SKUs. Forecast Pro Batch supports an unlimited number of levels, any combination of top-down and bottom-up reconciliation and can compute seasonal/promotional patterns at a given level and apply them to lower levels. If the user adjusts forecasts judgmentally at any level, the entire hierarchy will be adjusted. The second unique feature is event modeling. Event models were invented by Dr. Robert Goodrich, the president of BFS. Event models extend exponential smoothing by providing adjustments for special events like promotions, strikes or other irregular occurrences. Event models are easy to build and adaptable to a wide variety of situations.

There are a couple of points made in the review which we wish to clarify. The reviewer correctly states that if you wish to manually adjust forecasts you must limit your data files to 1,024 variables or less. It should be noted, however, that the program allows you to group data files together into a script which will forecast all of the data files listed. Thus, if your script included 10 data files, each containing 1,000 variables, you could generate the forecasts, adjust the results and switch between the different data files with a click of the mouse. The second point we wish to clarify concerns our forecasting seminars. We would like to stress that attending one of our forecasting seminars is not required to use the software effectively. The vast majority of our users learn the program via the users manual and never undergo any formal training. Our courses are not product training sessions, they are seminars designed for individuals who wish to learn more about how the statistical forecasting methods work and are applied to business data.

Finally, we would like to mention that BFS offers two other versions of Forecast Pro which were not included in this review. These versions are designed for individuals forecasting fewer than 100 variables and sell for under $1,000.

-- Eric A. Stellwagen, Vice President Business Forecast Systems, Inc.