250 Book reuiews

References

Gardner. G., A.C. Harvey and G.D.A. Phillips, 1980, An algorithm for exact maximum likelihood estimation of autoregressive-moving average models by means of Kalman filtering, Applied Statistics 29. 311-322.

Phillip A. Cartwright University of Georgia, Athens, GA

Harry R. White, Sales Forecasting: Timesaving and Profit-making Strategies that Work (Sales Executives Club of New York, Scott, Foresman and Company, Glenview, IL, 1984) $24.95, pp. 180.

The stated objective of this book is to provide ‘an abbreviated view of current sales forecasting practices and problems’, (p. 3). Furthermore, as is stated in the preface, this book is intended for those individuals who (1) know little about sales forecasting and want to learn more about this fascinating and increasingly sophisticated marketing tool, and (2) find most of the literature on the subject rather technical and hard to digest, or (3) want to improve their present forecasting methods by adopting a few ideas from other companies and comparing their experiences and problems with their own.

The potential reader of this book must keep this objective and these assumptions in mind as this book (the authors actually prefer to regard this as a report) is not designed to provide a detailed description of various forecasting techniques. While there are a few models and equations sprinkled throughout the text, as a general rule few technical descriptions of any technique are offered. However, this should not deter from some of the positive aspects of this book.

The majority of the book is dedicated to presenting the results of a survey. This survey was in fact a nine-page questionnaire which was distributed to 2,300 members of the Sales Executives Club of new York. A total of 222 people reponded to the questionnaire and the results were tabulated in total and by size of company (small, medium and large). Based upon the format in several of the early chapters, I suspect that each of the book’s chapters center around some aspect of the survey responses. A useful addition to the book would have been a copy of the actual questionnaire that was utilized.

An additional feature of each of the chapters is that there are actual discussions of each of the chapter topics in what I assume is an actual situation. These examples appear to be drawn from the experiences of those firms and individuals who responded to the questionnaire.

Perhaps the first point that should be made regarding this book is that even though the title is Sales Forecasting, much of the discussion is applicable to any type of forecasting. Topics such as forecast frequency, accuracy, use of outside consultants, methods of forecasting, time series analysis, to mention a few are equally applicable in a production, or financial environment. Thus, the title should not discourage individuals whose primary responsibilities is in areas other than sales forecasting.

The forecasting techniques covered range from judgemental forecasting, to sales force estimations, to time-series forecasting (moving average and exponential smoothing) to regression modeling. In discussing each of these techniques the authors concentrate on presenting a non-technical explanation on the usefulness of the technique. As a result of this limited technical discussion, this book should be regarded as either an introduction to forecasting as practiced, or as a useful guide for management in interpreting and using forecasts. Conversely, the report should not be regarded as a guide to developing forecasts or using the variety of techniques which are available.

Within the province of the forecasting techniques presented, the strongest coverage is in the areas

Book reviews 251

of time series models such as moving average and exponential smoothing models. The weakest coverage is in the area of regression analysis. Particularly discouraging was the omission of any discussion regarding the use of techniques such as transformations, distributed lags, and combining time-series models with regression models. There is virtually no discussion on topics such as forecast accuracy and reliability, autocorrelation, monitoring forecast error, advantages and disadvantages of each of the techniques, and what factors are involved in technique selection. Each of these topics is significant enough to warrant a discussion in all books dealing with forecasting.

The authors do include four items that can prove useful to even the most polished forecaster. Ch. 13 provides a concise and informative discussion on the presentation of forecasts to management. This is perhaps the most difficult aspect of forecasting and any addition to the literature in this area is welcome. Ch. 14 provides a good overview of the computerization of the forecasting process. This includes an overview of the terminology, personal computer applications and publications. The dictionary of terms which is provided in ch. 15 should prove to be very helpful to those individuals who are not forecasters yet must communicate with and use the information generated by forecasters. The additional readings presented in ch. 16 will also prove to be useful to an individual who is just beginning a study of the area of forecasting.

While the technical discussions of forecasting and forecasting techniques are of limited value, the report nevertheless has some positive aspects. To the individual who is just entering the field of forecasting, this report provides a good overview of the forecasting process. To the non-technical manager who must deal with the forecasting process, this book will be a welcome addition especially in the areas of concise explanations. As a practicing forecaster with approximately 15 years of experience, I found that the most useful portion of this book to be those sections where the authors concentrated on the preparation of forecasts for management, the use of forecasts by management, and the discussions of new product forecasting. Subject to the qualifications made previously and made by the authors of this book, overall perception of this book is positive. For those of us in forecasting, there is sometimes a tendency to forget that not all of the users of forecasts have the same interests and background. From my perspective, any book which discusses the interaction of management with the forecaster is well worth reading.

Dale Bails Memphis State University, Memphis, TN

Perry J. Kaufman, ed., Handbook of Futures Markets: Commodity, Financial Stock Index and Options (Wiley-Interscience, New York, 1984) $75.00/&86.95, pp. 1500 approx.

Jack D. Schwager, A Complete Guide to the Futures Markets: Fundamental Analysis, Technical Analysis, Trading, Spreads and Options (Wiley-Interscience, New York, 1984) $29.95/&34.65, pp. 741.

These two books are aimed at slightly different audiences. The massive (1500 page) book edited by Perry Kaufman does not intend to deal in great depth with any particular aspect of commodity trading or price-forecasting, but gives (i) a basic outline of how futures markets work and (ii) a large number of reviews of what variables influence prices for the major products. It is a reference book - nobody would read it from beginning to end - and it is appropriately well indexed. The book by Jack Schwager is also long (741 pages), but well-written and therefore not forbidding to the casual reader. Its aim is primarily to forecast commodity prices, having first introduced the basics of futures trading. It is much more interesting for a forecaster than the Kaufman book and so this review will concentrate on it.