Method and situational factors in sales forecast accuracy

In this study the interaction of forecasting method (econometric versus exponential smoothing) and two situational factors are evaluated for their effects upon accuracy. Data from two independent sets of ex ante quarterly forecasts for 19 classes of mail were used to test hypotheses. Counter to expectations, the findings revealed that forecasting method did not interact with the forecast time horizon (short versus long term). However, as hypothesized, forecasting method interacted significantly with product/market definition (First Class versus other mail), an indicator of buyer sensitivity to marketing/environmental changes. Results are discussed in the context of future research on forecast accuracy.