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Forcast to Actual Analysis for Means / Hypothesis

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  • #24704

    Black Belt guy
    Participant

    An MBB told me that when conducting hypothesis testing of means on financial projects such as forcast to actual that all of the data points should be transformed to absolute values.  Does anyone know why this would be done?

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    #59221

    Adam Bowden
    Participant

    The MBB s probably wanting you to use a Chi Sq table rather than
    another method.If you look at forecasting the business does not want to hear about
    P values as they don’t understand them. It may be worth
    transforming the language into one that they understand like %
    accuracy by month, quarter, year etc and keep the stat stuff in your
    pocket. At the end of the day so what if you detect a statistically significant
    difference in means – what are you going to do next ? You need to
    identify key drivers like market, product, seasonality, sales forecast
    accuracy, finance cut off rules, Marketing promotions etc etc.Good luck.Adam

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