Using Process Behaviour Charts to Improve Forecasting and Decision Making

Martin and Alec have long studied the application of statistical process control (SPC) concepts to forecasting and planning. The objective of SPC is to distinguish ÒnormalÓ variation in the output of a process from a signal that the process is changing Ð and possibly out of control. The authors show 1) how Process Behaviour Charts (PBCs) can be created and used to good effect within S&OP and budgeting by providing context for observed changes in sales, and 2) whether they are signalling that a forecasting problem should be addressed. Copyright International Institute of Forecasters, 2013