Creating an accurate forecast begins by reviewing history. But what if you haven’t collected data that can act as a good representation of what to expect?
That was the challenge facing Arthur Kordon, Leader of the Advanced Analytics Group, The DOW Chemical Company in 2009.
The 2008 crisis hit like a hurricane with record lows in the manufacturing market in January 2009. Eager to invest in sectors wisely, DOW called upon its analytics experts to provide critical advice.
They took 3 approaches:
• Cycle characterization
• Sector delay characterization
• Turns characterization
In all, the methods and indexes used gave then some asymmetrical and symmetrical insights into what markets would move when, but there wasn’t one specific approach that gave the answer. A combination of estimates had to be used to make their best guess on sector dynamics.
Today, the Advanced Analytics Group at DOW are receiving requests for forecasting insights every day.
• Read more about the methods used in “When an Economic Hurricane Hits Without Warning”
• And check out Mike Gillilands Business Analytics 101 on forecasting for more tips and recommendations.
