Demand Forecasting for Executives

and Professionals 1st Edition Kolassa

Visit to download the full and correct content document:
https://textbookfull.com/product/demand-forecasting-for-executives-and-professionals
-1st-edition-kolassa/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...

Forecasting for the Pharmaceutical Industry 1st Edition

Cook

https://textbookfull.com/product/forecasting-for-the-
pharmaceutical-industry-1st-edition-cook/

Capital Allocation and Value Creation A Market Based

Framework for Executives 1st Edition Arenbo

https://textbookfull.com/product/capital-allocation-and-value-
creation-a-market-based-framework-for-executives-1st-edition-
arenbo/

An introduction to nonparametric statistics First

Edition Kolassa

https://textbookfull.com/product/an-introduction-to-
nonparametric-statistics-first-edition-kolassa/

SAS for Forecasting Time Series John C. Brocklebank

https://textbookfull.com/product/sas-for-forecasting-time-series-
john-c-brocklebank/
Demand for labor : the neglected side of the market 1st
Edition Hamermesh

https://textbookfull.com/product/demand-for-labor-the-neglected-
side-of-the-market-1st-edition-hamermesh/

Electrocardiography for healthcare professionals Booth

https://textbookfull.com/product/electrocardiography-for-
healthcare-professionals-booth/

Forecasting Principles and Practice Athanasopoulos

https://textbookfull.com/product/forecasting-principles-and-
practice-athanasopoulos/

Demand for Emerging Transportation Systems: Modeling

Adoption, Satisfaction, and Mobility Patterns 1st
Edition Constantinos Antoniou

https://textbookfull.com/product/demand-for-emerging-
transportation-systems-modeling-adoption-satisfaction-and-
mobility-patterns-1st-edition-constantinos-antoniou/

Research Degrees for Health Professionals 1st Edition

Richard Hays

https://textbookfull.com/product/research-degrees-for-health-
professionals-1st-edition-richard-hays/
 Demand Forecasting
for Executives and
Professionals
This book surveys what executives who make decisions based on forecasts and professionals respon-
sible for forecasts should know about forecasting. It discusses how individuals and firms should think
about forecasting and guidelines for good practices. The book introduces readers to the subject of
time series, presents basic and advanced forecasting models, from exponential smoothing across
ARIMA to modern Machine Learning methods, and examines human judgment’s role in interpreting
numbers and identifying forecasting errors and how it should be integrated into organizations.

This is a great book to start learning about forecasting if you are new to the area of forecasting or have
some preliminary exposure to it. Whether you are a practitioner, either in a role managing a forecast-
ing team or operationally involved in demand planning, a software designer, a student, or an academic
teaching business analytics, operational research, or operations management courses, the book can
inspire you to re-think demand forecasting.

No prior knowledge of higher mathematics, statistics, operations research, or forecasting is assumed

in this book. It is designed to serve as a first introduction to the non-expert who needs to be familiar
with the broad outlines of forecasting without specializing in it. This may include a manager oversee-
ing a forecasting group, or a student enrolled in an MBA program, an executive education course, or
programs not specializing in analytics. Worked examples accompany the key formulae to show how
they can be implemented.
Key Features:
• While there are many books about forecasting techniques, very few are published targeting man-
agers. This book fills that gap.
• It provides the right balance between explaining the importance of demand forecasting and pro-
viding enough information to allow a busy manager to read a book and learn something that can
be directly used in practice.
• It provides key takeaways that will help managers to make a difference in their companies.

Dr. Stephan Kolassa is a Data Science Expert at SAP, Switzerland and Honorary Researcher at Lan-
caster University, UK.

Dr. Bahman Rostami-Tabar is an Associate Professor in Data and Management Science, at Cardiff
University, UK.

Prof. Enno Siemsen is the Patrick A. Thiele Distinguished Chair in Business, University of Wisconsin-
Madison, USA.
Demand Forecasting
for Executives and
Professionals

Stephan Kolassa, Bahman Rostami-Tabar

and Enno Siemsen
Designed cover image: © Marjolein Poortvliet
First edition published 2024
by CRC Press
6000 Broken Sound Parkway NW, Suite 300, Boca Raton, FL 33487-2742

and by CRC Press

4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

CRC Press is an imprint of Taylor & Francis Group, LLC

© 2024 Stephan Kolassa, Bahman Rostami-Tabar and Enno Siemsen

Reasonable efforts have been made to publish reliable data and information, but the author and pub-
lisher cannot assume responsibility for the validity of all materials or the consequences of their use.
The authors and publishers have attempted to trace the copyright holders of all material reproduced
in this publication and apologize to copyright holders if permission to publish in this form has not
been obtained. If any copyright material has not been acknowledged please write and let us know so
we may rectify in any future reprint.

Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced,
transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying, microfilming, and recording, or in any information stor-
age or retrieval system, without written permission from the publishers.

For permission to photocopy or use material electronically from this work, access www.copyright.com
or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923,
978-750-8400. For works that are not available on CCC please contact mpkbookspermissions@tandf.co.uk

Trademark notice: Product or corporate names may be trademarks or registered trademarks and are
used only for identification and explanation without intent to infringe.

Library of Congress Cataloging-in-Publication Data

Names: Kolassa, Stephan (Data science expert), author. | Rostami-Tabar,
Bahman, author. | Siemsen, Enno, author.
Title: Demand forecasting for executives and professionals / Stephan
Kolassa, Bahman Rostami-Tabar and Enno Siemsen.
Description: First edition. | Boca Raton, FL : CRC Press, 2024. | Includes
bibliographical references and index.
Identifiers: LCCN 2023013054 (print) | LCCN 2023013055 (ebook) | ISBN
9781032507736 (hardback) | ISBN 9781032507729 (paperback) | ISBN
9781003399599 (ebook)
Subjects: LCSH: Economic forecasting. | Decision making.
Classification: LCC HB3730 .K615 2024 (print) | LCC HB3730 (ebook) | DDC
330.01/12--dc23/eng/20230703
LC record available at https://lccn.loc.gov/2023013054
LC ebook record available at https://lccn.loc.gov/2023013055

ISBN: 978-1-032-50773-6 (hbk)

ISBN: 978-1-032-50772-9 (pbk)
ISBN: 978-1-003-39959-9 (ebk)

DOI: 10.1201/9781003399599

Typeset in Latin Modern font

by KnowledgeWorks Global Ltd.

Publisher’s note: This book has been prepared from camera-ready copy provided by the authors.
Contents

Preface xi
Who this book is for . . . . . . . . . . . . . . . . . . . . . . . . xi
How to read this book . . . . . . . . . . . . . . . . . . . . . . . xii
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . xii

Introduction 1
1 Introduction 3
1.1 The value of a good forecasting process . . . . . . . . . . . . . 3
1.2 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2 The forecasting workflow 9

2.1 Identify a decision requiring a forecast . . . . . . . . . . . . . 9
2.2 Determine requirements . . . . . . . . . . . . . . . . . . . . . 10
2.3 Gather data and information . . . . . . . . . . . . . . . . . . . 12
2.4 Prepare data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Visualize data . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 Choose and train models . . . . . . . . . . . . . . . . . . . . . 13
2.7 Produce forecast . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8 Evaluate quality . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.9 Communicate forecast . . . . . . . . . . . . . . . . . . . . . . 15
2.10 Possibly adjust forecast . . . . . . . . . . . . . . . . . . . . . . 15
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3 Choice under uncertainty 17

3.1 Forecasting methods . . . . . . . . . . . . . . . . . . . . . . . 17
3.2 Forecasts and service levels . . . . . . . . . . . . . . . . . . . . 23
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

4 A simple example 27
4.1 A point forecast . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 Prediction intervals . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3 Predictive distributions . . . . . . . . . . . . . . . . . . . . . . 33
4.4 Decision-making . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

v
vi Contents

Forecasting basics 37
5 Know your time series 39
5.1 Data availability . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2 How much data is necessary? . . . . . . . . . . . . . . . . . . . 41
5.3 Data quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.4 Stationarity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 Forecastability and scale . . . . . . . . . . . . . . . . . . . . . 45
5.6 Using summary statistics to understand your data . . . . . . . 49
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

6 Time series components 51

6.1 Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.2 Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.3 Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.4 Cyclical patterns . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.5 Other characteristics of time series . . . . . . . . . . . . . . . 57
6.6 Visualizing time series features . . . . . . . . . . . . . . . . . . 57
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

7 Time series decomposition 63

7.1 The purpose of decomposition . . . . . . . . . . . . . . . . . . 63
7.2 Decomposition methods . . . . . . . . . . . . . . . . . . . . . 64
7.3 Stability of components . . . . . . . . . . . . . . . . . . . . . . 67
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Forecasting models 69
8 Low-hanging fruit: simple forecasts 71
8.1 The historical mean . . . . . . . . . . . . . . . . . . . . . . . . 71
8.2 The naive forecast . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.3 The seasonal naive forecast . . . . . . . . . . . . . . . . . . . . 72
8.4 Other simple methods . . . . . . . . . . . . . . . . . . . . . . 73
8.5 Non-expectation forecasts . . . . . . . . . . . . . . . . . . . . 73
8.6 Ensemble forecasting . . . . . . . . . . . . . . . . . . . . . . . 74
8.7 When are our forecasts too simple? . . . . . . . . . . . . . . . 74
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

9 Exponential smoothing 77
9.1 Change and noise . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.2 Optimal smoothing parameters . . . . . . . . . . . . . . . . . 80
9.3 Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Contents vii

10 ARIMA models 85
10.1 Autoregression . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.2 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.3 Moving averages . . . . . . . . . . . . . . . . . . . . . . . . . . 88
10.4 Autocorrelation and partial autocorrelation . . . . . . . . . . . 89
10.5 Information criteria . . . . . . . . . . . . . . . . . . . . . . . . 91
10.6 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

11 Causal models and predictors 95

11.1 Association and correlation . . . . . . . . . . . . . . . . . . . . 95
11.2 Predictors in forecasting . . . . . . . . . . . . . . . . . . . . . 98
11.3 Leading and lagging predictors . . . . . . . . . . . . . . . . . . 99
11.4 An example: advertising and sales . . . . . . . . . . . . . . . . 99
11.5 Correlation, causation and forecasting . . . . . . . . . . . . . . 101
11.6 Combination with time series . . . . . . . . . . . . . . . . . . 103
11.7 Model complexity and overfitting . . . . . . . . . . . . . . . . 105
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

12 Count data and intermittent demand 109

12.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.2 Traditional forecasting methods . . . . . . . . . . . . . . . . . 112
12.3 Croston’s method . . . . . . . . . . . . . . . . . . . . . . . . . 113
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

13 Forecasting hierarchies 119

13.1 Structural hierarchies . . . . . . . . . . . . . . . . . . . . . . . 119
13.2 Forecasting hierarchical time series . . . . . . . . . . . . . . . 121
13.3 Temporal hierarchies and aggregation . . . . . . . . . . . . . . 129
13.4 When do we not want coherent forecasts? . . . . . . . . . . . 136
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

14 Artificial intelligence and machine learning 139

14.1 Neural networks and deep learning . . . . . . . . . . . . . . . 139
14.2 Tree-based methods and random forests . . . . . . . . . . . . 141
14.3 Boosting and variants . . . . . . . . . . . . . . . . . . . . . . . 143
14.4 Point, interval and density AI/ML forecasts . . . . . . . . . . 144
14.5 AI and ML versus conventional approaches . . . . . . . . . . . 144
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

15 Long, multiple and non-periodic seasonal cycles 147

15.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
15.2 Long seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . 149
15.3 Multiple seasonalities . . . . . . . . . . . . . . . . . . . . . . . 150
15.4 An example: ambulance demand . . . . . . . . . . . . . . . . . 150
15.5 Modeling complicated seasonality . . . . . . . . . . . . . . . . 152
viii Contents

15.6 Forecasting models for complicated seasonality . . . . . . . . . 156

Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

16 Human judgment 163

16.1 Cognitive biases . . . . . . . . . . . . . . . . . . . . . . . . . . 163
16.2 Domain-specific knowledge . . . . . . . . . . . . . . . . . . . . 166
16.3 Political and incentive aspects . . . . . . . . . . . . . . . . . . 167
16.4 Correction and combination . . . . . . . . . . . . . . . . . . . 168
16.5 Forecasting in groups . . . . . . . . . . . . . . . . . . . . . . . 169
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

Forecasting quality 173

17 Error measures 175
17.1 Bias and accuracy . . . . . . . . . . . . . . . . . . . . . . . . . 175
17.2 Percentage, scaled and relative errors . . . . . . . . . . . . . . 180
17.3 Assessing prediction intervals and predictive distributions . . . 188
17.4 Accuracy measures for count data forecasts . . . . . . . . . . . 190
17.5 Forecast accuracy and business value . . . . . . . . . . . . . . 192
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

18 Forecasting competitions 195

18.1 Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
18.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
18.3 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
18.4 Additional aspects . . . . . . . . . . . . . . . . . . . . . . . . . 199
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

Forecasting organization 203

19 Leading forecasters and forecasting teams 205
19.1 The ideal forecaster . . . . . . . . . . . . . . . . . . . . . . . . 205
19.2 How do forecasters tick? . . . . . . . . . . . . . . . . . . . . . 208
19.3 Making your forecaster happy . . . . . . . . . . . . . . . . . . 210
19.4 What can you expect from your forecaster? . . . . . . . . . . . 211
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

20 Sales and operations planning 213

20.1 Forecasting organization . . . . . . . . . . . . . . . . . . . . . 213
20.2 Organizational barriers . . . . . . . . . . . . . . . . . . . . . . 214
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

21 Why does forecasting fail? 217

21.1 There is no alternative to forecasting . . . . . . . . . . . . . . 217
Contents ix

21.2 What we can forecast . . . . . . . . . . . . . . . . . . . . . . . 218

21.3 We can’t achieve unlimited accuracy . . . . . . . . . . . . . . 219
21.4 Confusing forecasts, targets, decisions and plans . . . . . . . . 219
21.5 No systematic tracking of forecast quality . . . . . . . . . . . 220
21.6 Inappropriate error measures . . . . . . . . . . . . . . . . . . . 220
21.7 Data availability and quality . . . . . . . . . . . . . . . . . . . 220
21.8 Too much judgmental intervention . . . . . . . . . . . . . . . . 221
21.9 Follow-on processes do not leverage forecasts . . . . . . . . . . 222
21.10 Feedback to the process being forecasted . . . . . . . . . . . . 222
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

Learning more 225

22 Resources 227
22.1 Non-technical material . . . . . . . . . . . . . . . . . . . . . . 227
22.2 Somewhat technical material . . . . . . . . . . . . . . . . . . . 228
22.3 Technical material . . . . . . . . . . . . . . . . . . . . . . . . . 229
22.4 Non-profit organizations . . . . . . . . . . . . . . . . . . . . . 229
22.5 Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
22.6 Datasets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
22.7 Online resources . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231

References 233

Index 249
Preface

Forecasting is the art and science of predicting the future, not with a magical
crystal ball, but with proven statistical methods based on objective data. With
more data and an improved understanding of forecasting methods, decisions
become more influenced by forecasts.
We can forecast many things, from tomorrow’s weather to financial markets
to election results. This book focuses on one specific use case for forecasting:
forecasting demand for products or services.
There are many books and articles to learn from (see Chapter 22). This book
is not an in-depth technical treatise. Instead, it aims to bring you up to speed
with minimal pain, prepare you to learn more, or have intelligent conversations
about forecasting with experts. Read the Preface to find out whether this book
is for you.
This book is also available online at https://dfep.netlify.app/, where we will
update it continually.
Happy forecasting!

Who this book is for

This book is a high-level introduction to demand forecasting. It will, by itself,
not turn you into a forecaster. It gives you an overview of the most common
forecasting methods and the mindset behind forecasting. This book is for you
if you
• Are a manager responsible for forecasters
• Are an IT professional whose responsibilities include administering a fore-
casting system
• Are an executive making decisions based on the forecasts generated by
someone else in your work
• Contemplate learning more about forecasting without delving deep into
the details (yet)
• Want to learn about forecasting and need a companion book to give you
an overview, along with more technical in-depth materials

xi
xii Preface

How to read this book

We divide this book into six parts:
• The “Introduction” gives an overview, setting the scene and explaining
the basic philosophy of this book: forecasting is indispensable for making
decisions under uncertainty.
• “Forecasting basics” discusses the essential toolbox of forecasters: knowing
your time series, time series features, and time series decomposition into
seasonal and trend components.
• “Forecasting models” gives a very high-level introduction to standard
models: simple methods, Exponential Smoothing, ARIMA, causal models,
count data and intermittent demand, and Artificial Intelligence/Machine
Learning.
• “Forecasting quality” explains how to assess the quality of a forecast (which
holds some pitfalls for the unwary) and what forecasting competitions are.
• “Forecasting organization” discusses organizational and human aspects of
forecasting: what to look for in a forecaster, how to deal with forecasters,
how to build a forecasting team, and why forecasting fails.
• Finally, “Learning more” points to various resources to learn more, from
textbooks at various levels of technical detail, across organizations and
events to websites.
While we did our best to provide good information and advice on forecasting,
your forecasts are your own, so use them responsibly. If you create and act on
a forecast, we disclaim any responsibility for any adverse outcomes. This book
is a learning guide; it will not automatically make your forecasts as accurate
as you would like them to be.

Acknowledgments
We want to thank Business Expert Press, publishers of our earlier book (Kolassa
and Siemsen 2016), for allowing us to reuse much of the material in this new
book and, more generally, for being great publishers. Special thanks to Scott
Isenberg for his guidance over the years.
In addition, we would like to thank CRC Press for allowing us to publish an
online version of this book.
We thank Marjolein Poortvliet, who created a very inspirational title page for
this book and endured our requests for changes and adaptations.
We are also grateful to the people who created and maintained the free tools
we used in preparing this book, from the statistical programming environment
R (R Core Team 2022) and the packages we used (Xie 2022; Hyndman and
Kourentzes 2018; Wickham et al. 2019; Schauberger and Walker 2022; Zhu
2021; Arnold 2021; Hyndman et al. 2021; Hyndman 2020; Stoffer and Poison
2023; Slowikowski 2023) to LATEX (The LaTeX community, n.d.).
Preface xiii

Thanks are also very much due to Nicolas Vandeput, who pointed out a number
of shortcomings in a draft of this book.
SK would like to express his gratitude to his long-suffering but patient family,
Iris, Sophie and Philipp, who did not see much of him when this book was on
the home stretch. He is also thankful to his co-authors for a long, sometimes
grueling, but never boring journey together.
BRT would like to thank his partner, Maryam, for her love and continuous
patience during the whole process of writing this book. He also expresses his
gratitude to his co-authors for their valuable contributions and the opportunity
to collaborate on this book.
ES deeply thanks his wife, Min, and children, Oskar and Thalia. Their love
has always kept him going. ES also thanks his co-authors, his team, and Dean
Samba for allowing him to work on this project despite managing a portfolio
of graduate programs.
Finally, we are grateful to you, our reader, for investing your time and energy
in reading our book. We hope you will learn a lot and even occasionally will
be entertained!
Introduction
1
Introduction

Why do we forecast at all? Forecasts are necessary for any decision under
uncertainty. Good forecasts can be very valuable. Bad forecasts can threaten
your company’s very survival. This chapter discusses the value of a good
forecasting process and briefly examines forecasting software.

1.1 The value of a good forecasting process

It is common to become frustrated about forecasting. The necessary data is
often dispersed throughout the organization. The algorithms used to analyze
this data are often opaque. Those within the organization trained to understand
the algorithms often do not understand the business, and those who breathe the
business do not understand the algorithms. The actual forecast is then discussed
in long and unproductive consensus meetings between diverse stakeholders
with often conflicting incentives; in between, the forecast is often confused
with goals, targets, and plans. The resulting consensus can be a political
compromise far removed from any optimal use of information. Decision-makers
often ignore these forecasts and instead come up with their own guess since
they do not trust the forecast and the process that created it. Even if the
forecasting process works well, the inherent demand uncertainty often creates
actuals far from the forecast. It is hard to maintain clarity in such a setting
and not become frustrated by how challenging it is to rely on forecasts.
Yet, what alternative do we have? Eliminating the forecasting process within
an organization will only create worse parallel shadow processes. Every plan,
after all, needs a forecast, whether that forecast is an actual number based on
facts or just the gut feeling of a planner. Some companies can change their
business model to a make-to-order system, eliminating the need to forecast
demand and manufacture their products to stock. However, this alternative
model still requires ordering components and raw materials based on a forecast,
planning capacity, and training the workforce according to an estimate of future
demand. Even a make-to-order system relies on an implicit forecast, namely
that demand will stay sufficiently stable for the system to keep working.

3
4 Introduction

A central metric for every supply chain is how long it would take for all partners
in the supply chain to move one unit – from the beginning to the end – into the
market. This metric shows the total lead time in the supply chain. If customers
are not willing to wait that long for a product, a supply chain cannot change
to a complete make-to-order system. Someone in the supply chain will need to
forecast and hold inventory. If that forecasting system fails, the supply chain
will feel the resulting costs and disruptions.
Every manager involved in forecasting must accept that there are no good or
bad forecasts. There are only good or bad ways of creating or using forecasts.
Forecasts should contain all the relevant information available to the organi-
zation and its supply chain about the market. Information is everything that
reduces uncertainty. If a forecast is far from the actual demand, but the process
that generated the forecast used all available information, the organization
had bad luck. Conversely, if a forecast is spot on, but the process that created
it neglected important information, the organization was lucky but should
consider improving its forecasting process. In this sense, bad forecasts can
only result from bad forecasting processes. As with decision-making under
uncertainty generally, one should not question the quality of the decision or
forecast itself given the actual outcome; one should only examine the process
that led to this decision or forecast. Betting money in roulette on the number
20 does not become a bad choice just because the ball rolls onto a different
number – and neither does it become a better choice if the ball happens to
land on the 20!
Different time series are more or less predictable. If a series has much un-
explainable variation, there is a limit to how well we can forecast it. Figure
1.1 offers an example of two time series that are very different in their fore-
castability. While a good forecasting process will lead to better predictions
for a time series by explaining some variation in the series, there are limits
to the inherent predictability of such series. Repeated inaccurate forecasts
may be a sign of a bad forecasting process but may also result from excessive
noise in the underlying demand. Accordingly, a good forecasting process is
not necessarily one that predicts a time series perfectly but one that improves
the forecasts for a series compared to simple forecasting methods (which can
be pretty competitive indeed, see Chapter 8). We will discuss the concept
of forecastability in more detail in Chapter 5 and examine how to deal with
failure in the forecasting process in Chapter 21.
Many organizations rely exclusively on point forecasts. A point forecast is a
single number – an estimate of what an unknown quantity will most likely be.
It is, however, improbable that the actual number will be exactly equal to the
point forecast. Thus, one always needs to consider and deal with the remaining
uncertainty in the forecast. Ideally, one should conceptualize a forecast as a
probability distribution. That distribution can have a center, usually equal to
the point forecast. Yet that distribution also has a spread, representing the
The value of a good forecasting process 5

FIGURE 1.1
Easy and hard to forecast time series

remaining uncertainty around the point forecast. Good forecasting processes

will communicate this spread effectively; bad forecasting processes will remain
silent on this issue, projecting unrealistic confidence in a single number. Further,
failing to communicate the inherent forecast uncertainty can lead to decision-
makers using highly uncertain and highly certain forecasts similarly. It is
common, for example, for firms to require equal safety stocks across different
products, even though the uncertainty inherent in these products may vary
vastly. The root cause of this problem often lies in insufficient reporting of
uncertainty. We will further explore the idea of probabilistic forecasting in
Chapters 3 and 4.
The effective design of forecasting processes seems complicated, but the benefits
of getting the forecasting process right are tremendous. Fixing the forecasting
process is a managerial challenge that usually does not require significant
financial investments. The challenge of improving the forecasting process often
does not lie in investing in advanced machines or information technology or in
the costs of hiring more people and expanding the organization. Instead, the
challenge is managing cross-functional communication and pushing through
change despite many stakeholders (J. Smith 2009).
Yet, the returns can be huge if an organization can overcome these challenges.
For example, Oliva and Watson (2009) documented that the improvement
of a forecasting process at an electronics manufacturing company led to a
doubling of inventory turns and a decrease of 50% in on-hand inventory. Sim-
ilarly, Clarke (2006) documents how the major overhaul of the forecasting
process at Coca-Cola Inc. led to a 25% reduction in days of inventory. These
are supply chain improvements that would otherwise require significant in-
vestments in technology; if an organizational change (though challenging and
6 Introduction

time-consuming) of the forecasting process can achieve similar objectives, every

manager should take the opportunity to improve forecasting processes seriously.

1.2 Software
While we often highlight the managerial aspects of forecasting in this book, we
also delve into the statistics of forecasting. Our goal in doing so is to provide
managers with a basic intuition on how forecasting algorithms work – to shine
some light into this black box. In this context, we emphasize that this book
does not assume the use of any particular forecasting software. There is a large
set to choose from when selecting a forecasting software, and a comprehensive
review of the features, strengths, and weaknesses of all commercially available
products is beyond the scope of this book. For an overview, interested readers
may visit the OR/MS biannual survey of forecasting software; the most recent
one was authored by Schaer et al. (2022).
Especially in the earlier chapters of this book, we will refer to functions in
Microsoft Excel to help readers implement some ideas. This spreadsheet mod-
eling software is widely available, and most managers will have a copy installed
on their laptops or tablets. However, Excel suffers from inaccuracies in its
statistical and optimization functions (Mélard 2014). We would not wager
that Microsoft has addressed these issues in the more recent version of Excel.
Further, the standard functionality of Excel only allows for very limited time
series analysis and forecasting. Therefore, using Excel for forecasting inevitably
requires some coding and manual entry of formulas. Maintaining a consistent
forecasting process in Excel is challenging. Spreadsheets start accumulating
errors and undocumented changes over time (Singh 2013). When implemented
correctly, spreadsheets have the advantage of being very transparent. Com-
mercially available forecasting software, on the contrary, can often have a
black-box character. Excel is a good complementary tool for forecasting –
learning, communicating, and testing out new ideas – but it should not become
a standard, permanent tool for forecasting in an organization.
An important alternative is the free statistical computing environment R
(https://www.r-project.org/, R Core Team 2022). While R is more difficult
to learn and use than Excel, its functionality is much broader. Through user-
written content, many existing forecasting methods are free in R (Kolassa
and Hyndman 2010). Furthermore, Integrated Developing Environments (IDE)
like RStudio (https://posit.co/) make the software more accessible, and
excellent introductory books to R from a forecasting perspective are available
(see Section 22.2). The forecast (Hyndman et al. 2023) and fable packages
(O’Hara-Wild et al. 2020) are the gold standard of forecasting.
Software 7

Similarly, many Data Scientists nowadays use Python, a ubiquitous program-

ming language. One key advantage of Python over R is that software or IT
professionals outside the forecasting world are much more likely to be familiar
with it, making it easier to share code across functional boundaries. Python
does have some time series forecasting functionalities. However, its forecasting
strengths lie more in modern Machine Learning tools (see Chapter 14), and
not so much in the classic time series tools. Nixtla (https://github.com/Nixtla)
produced a lot of time series tools that are fast and perform well compared
to various alternatives. Packages like statsforecast (Federico Garza 2022),
pmdarima (T. G. Smith et al. 2022), sktime (Löning et al. 2019) mainly aim
at replicating (and therefore invariably lag behind) functionalities from R.

Key takeaways
1. Almost every business decision is about the future and is thus based
on forecasts. We need forecasts. We cannot eliminate forecasts, but
we can question whether we have an effective forecasting process that
uses all available information within our organization and supply
chain.
2. Different time series will differ in how hard they are to predict.
Inaccurate forecasts may result from an ineffective forecasting process
or may be due to the unpredictable nature of a particular business.
3. No forecast is perfect. We need to directly confront, quantify, and
manage the uncertainty surrounding our forecasts. Failure to com-
municate this uncertainty makes risk management associated with
the forecast ineffective.
4. Fixing the forecasting process can lead to considerable improvements
in the organization and supply chain without significant technological
investments. The challenge is to manage cross-functional communi-
cations and overcome organizational silos and conflicting incentives.
2
The forecasting workflow

Producing forecasts to inform decisions is an iterative process involving several

potentially repeated steps. As shown in Figure 2.1, the forecasting workflow
starts by identifying the decision that the forecast supports. Once we under-
stand what decision the forecast informs, we need to derive the requirements
we need to meet. We next gather data and information, prepare and visualize
data, choose and train models, and produce the forecast. We can evaluate its
performance and iterate to improve. Or we stop the iteration, communicate
the forecast to stakeholders and possibly adjust the forecast by incorporating
human judgment. This chapter outlines these steps in detail.

2.1 Identify a decision requiring a forecast

Why prepare a forecast? If asked this question, most managers usually say, “to
inform our decisions.” A forecast has no purpose per se. At least one, if not many,
decisions within the organization require the forecast. This purpose determines
the forecasting requirements. Any forecasting task should therefore start with
identifying operational (short-term), tactical (mid-term), and strategic (long-
term) decisions which require forecasts.
Examples of strategic decision and planning processes include network design,
capacity planning, distribution channels, and workforce planning. At the
tactical level, example decisions include product/service assortments, staffing,
inventory optimization, and sales & operations planning (S&OP). At the
operational level, firms make decisions related to production and workforce
scheduling, distribution, transportation, and delivery plans. Forecasters must
understand how the forecast is used, who requires it, and how it fits in with the
organization. This initial step is essential and only sometimes straightforward.

9
10 The forecasting workflow

FIGURE 2.1
The forecasting workflow

2.2 Determine requirements

Each decision identified in the first step may require forecasting different data
at different granularities, horizons, frequencies, and structures. Decisions will
directly dictate the forecasting requirements, which should at least include the
following:
Determine requirements 11
TABLE 2.1
Planning and decision processes and forecast requirements

Level Decision Forecast Temporal Cross- Forecast

horizon granularity sectional type
granularity

Strategic Make-or- Years Yearly Total Point/

buy interval
Strategic Enter new Years Yearly Total Point/
market interval
Tactical Assortment Months/ Monthly Category Point
plan years
Tactical Promotion Weeks/ Weekly Brand Point
plan months
Operational Retail store Days/ Daily SKU Quantile
reordering weeks
Operational Staffing Days/ Hourly/ Per worker Point
plan weeks daily type

• The forecast variable is what we intend to forecast and is also known as

the response, output, or dependent variable. This variable should not be
confused with the decision that the forecast intends to inform.
• The forecast horizon is how far into the future we forecast.
• The forecast frequency defines how often we generate the forecast.
• The temporal granularity is the time granularity we forecast (e.g., daily,
weekly, and monthly totals).
• The cross-sectional granularity at which we forecast (e.g., SKU or product
group, store or region; see Chapter 13, especially Section 13.1).
Table 2.1 gives examples of the attributes of our forecasts driven by the decision.
In addition to determining the forecast requirements, we should consider some
additional elements at this stage. For instance: how much can the forecast
cost? How should we measure and report forecast accuracy? Does the forecast
improvement add value to the business? Is the forecasting method easy to
understand and interpretable? Should we use specific forecasting support
systems and software? We cover these topics in different sections of this book.
12 The forecasting workflow

2.3 Gather data and information

Once we have determined the forecasting requirements, we need to gather
the relevant data and information that we will use to develop our forecasting
model. Various types of data can be helpful at this stage:

1. Past/historical time series data on the variable we intend to forecast.

If we want to forecast the sales volume of a product in the future,
we need to collect past sales volume. Many organizations record
historical data at finer time granularity or arbitrary timestamps.
Forecasting usually requires some temporal aggregation. We discuss
this in detail in Section 13.3.
2. Past and future data about deterministic predictors. Predictors are
data that help us forecast a time series (see Chapter 11). A predictor
is deterministic if its future values are known or determined in
advance. Examples include different types of promotions or prices,
public holidays, festivals, or sports events. Deterministic predictors
can also be master data, which do not change over time, such as
colors or sizes of products.
3. Past and future data about stochastic predictors. A predictor is
stochastic if we cannot know its future values precisely. For instance,
while we know the past weather, future weather is unknown. There-
fore, we must forecast the future values of stochastic predictors if we
include them in a forecasting model. Suppose our forecast depends
on lagged values of a stochastic predictor (see Section 11.3). For
example, tomorrow’s headache medication sales depend on today’s
sports game outcome. In that case, we do not need to forecast the
predictor.
4. Expertise of individuals in an organization and any contextual infor-
mation that may affect the forecast variable. Domain knowledge of
those who collect data, analyze it, produce forecasts, or use them to
inform decisions is a valuable source of information. Such knowledge
will help you tell the story behind the data, incorporate it into
models and check the validity of the information. It can also be
the reason why we adjust the output of our statistical forecasting.
Sometimes, we may be unable to obtain enough data to use our
models. Without data, we rely on judgmental forecasting methods
alone (see Chapter 16), which incorporate domain knowledge of
people in the organization and up-to-date information about future
events.
Choose and train models 13

2.4 Prepare data

Once we have the necessary raw data, we need to ensure it is a reliable source of
information and is in the correct format for analysis and forecasting. Forecasting
models may have different data requirements; some require the series to be
in time order with no gaps, and others require no missing values. Checking
our data is essential to understanding its features and should always be done
before we train our models on data. Often, raw data has many problems, such
as formatting issues, errors, or missing values. Data preparation generally
involves importing data into the software, tidying the data, and checking and
fixing errors, missing values, duplicated observations, and temporal gaps.
Raw data can be messy in infinite ways, and technical data science skills are
often insufficient to prepare data for analysis. Using the knowledge of those
who collect or work with data is crucial in preparing data. See Section 19.1
on what skills this requires of the forecaster. Section 5.3 contains a relevant
discussion about data quality.

2.5 Visualize data

Before developing our model for a given dataset, we should conduct an initial
analysis by plotting our data using data visualization tools. Plotting data will
allow us to identify essential features such as trends or seasonality. If the data
has no systematic features, producing accurate forecasts is challenging. We can
use time series graphs to check data quality and identify unusual observations,
such as extreme values and outliers. If something unusual occurs in the data,
try to figure out what happened. Is it a product launch? Is it a special event
(e.g., Black Friday)? Or is it an error in the data? Visualizing data helps to
highlight potential issues and then take appropriate actions to fix them before
choosing and training models. We introduce various time series graphs in
Chapter 6 to help us visualize data.

2.6 Choose and train models

Which forecasting model should we choose? The answer depends on several
factors such as the type of decision the forecast intends to inform, forecasting
requirements, data availability, the strength of the relationships between pre-
dictors and the forecast variable, how important explainability is to us, and so
14 The forecasting workflow

on. It is common to choose, train and compare the performance of multiple

models. Each model may have different assumptions and account for different
types of systematic information. Instead of picking just one, we might use
multiple models and combine their forecasts (see Section 8.6).
Once we have chosen the model to use in forecasting, we need to train it on the
historical data. Training is the estimation of parameters using historical data
so that the model can forecast the output as close as possible to the actual
value. We examine some forecasting models in Chapter 8 to Chapter 16.

2.7 Produce forecast

Once we have selected and trained our models, we can use them to produce
forecasts for the required horizon. We can represent the forecast as a point
forecast, a prediction interval, or a probability density (see Chapter 4). If the
model uses only the historical time series to forecast, we must provide the
number of future observations we want to forecast. If our model uses additional
information, such as predictors, we need to provide a dataset of future values
of those predictors to generate the forecast. We discuss such causal models in
Chapter 11.

2.8 Evaluate quality

After training a model on the historical data and producing forecasts, it is
critical to investigate its performance. In this step, we want to ensure our
model has not failed in capturing the systematic information and did not
overfit by following unpredictable random errors. We can evaluate the forecast
accuracy of the model after observing actual data for the forecast period. We
provide more detail on assessing a model’s accuracy in Chapter 17.
However, “quality” also has dimensions besides accuracy, like runtime, storage
requirements, data requirements, or explainability. A method may provide
superior forecasting accuracy but run very slowly or be completely opaque
except to experts. Such properties would hinder its acceptance among business
users.
Another random document with
no related content on Scribd:
 Symptoms. These are very indefinite, depending very much on the
complications. Some loss or perversion of appetite, a licking of the
soil or walls, eating litter, filth and even manure, a clammy mouth, a
redness along the margin of the tongue, eructations or attempts to
eructate, or actual vomiting, colicy pains which are usually dull until
the bowels are implicated, more or less rumbling in the bowels,
sometimes icterus, in other cases tympany, and nearly always tardy
passage of hard and scanty mucus-covered fæces. The colics may be
intermittent, appearing only just after food is taken, or they may be
continuous, the animal pawing incessantly hour after hour. A slight
hyperthermia and a distinct tenderness of the epigastrium and left
hypochondrium to pressure are valuable symptoms. Percussion
causes even keener suffering.
If the gastric contents are abundant and fermentation active, death
may ensue from gastric tympany. In other cases, the persistence of
colics at the time of feeding, of impaired appetite, constipation and
loss of condition are the main symptoms. In the last named cases the
patient may die of marasmus.
Lesions. In cases terminating in fermentation and fatal tympany
the stomach is full; in other types it is empty of all but water, mucus,
and perhaps some irritant contents, or decomposed food. The
alveolar mucosa of the right sac and above all of the pylorus is red,
congested, petechiated, macculated, thickened to double its normal
thickness or more, thrown into rugæ, and covered with tenacious
mucus. This mucus is highly charged with detached epithelial cells,
and at different points the mucosa is abraded by their desquamation.
The epithelium generally shows swollen, opaque cells. The red
congested spots show active engorgement of the capillaries, and this
is especially marked around the glandular follicles, with more or less
formation of embryonic cells. The duodenum is often implicated with
similar lesions of the mucosa and its epithelial layers, which may
block the orifices of the pancreatic and especially of the biliary duct.
In this case there is a yellowish discoloration of the liver, excess of
pigment in the hepatic cells, and hemorrhagic spots in the liver and
even in the kidneys. The urine may be yellow or reddish brown from
the presence of bile or blood pigment. In ruptured stomach,
spiroptera, bots, and other irritants, we find their characteristic
lesions, and in petechial fever there is excessive and partly
hemorrhagic infiltration of the mucosa and submucosa. In
protracted cases ulcers may be present on both stomach and
intestine. When it is a localization of some specific fever the
characteristic lesions of that affection will be found.
Treatment. If appetite continues, diet should be restricted to a
very moderate allowance of green food, pulped roots, bran mash,
boiled flaxseed, boiled middlings, with pure water or whey. If there
are irritants in the stomach they may be got rid of by a laxative (aloes
4 drachms, or sulphate of soda ½ pound). Sodium bicarbonate (½
drachm 2 or 3 times daily) is desirable to stimulate peptic secretion
and check acid fermentations. Pepsin (2 drachms) should be given at
equal intervals. Fermentations should be checked by the use of salol
(1 to 2 drachms), naphthalin (1 to 2 drachms), benzo-naphthol (1 to 3
drachms), or calcium salicylate (2 drachms).
In this connection bitters are of value to improve the tone of the
gastric mucosa, nux vomica, gentian, quinia and quassia in
combination with ipecacuan giving good results.
 PHLEGMONOUS (PURULENT) GASTRITIS
IN THE HORSE.
Definition: deep inflammation tending to abscess. Causes: invasion by pus
microbes, infectious diseases, parasitism, traumas. Symptoms: hyperthermia,
colic, tenderness, icterus, coincident disease, hæmatemesis. Lesions: submucous or
subperitoneal abscess, parasites, peritonitis, exudation, thickening, neoplasm of
mucosa, catarrhal complications. Treatment: careful diet, antiseptics, bitters,
laxatives.
Definition. This is a gastric inflammation affecting the
membranous layers, and tending to submucous or subperitoneal
abscess. It is much less frequent than the catarrhal form.
Causes. It may be attributed to invasion of the gastric walls by pus
microbes, and appears as secondary abscess in pyæmia and above all
in strangles. The microbes are introduced more directly through the
wounds inflicted by the larvæ of œstrus, or by the burrowing of these
(Argus, Schlieppe, Schortmann), or of spiroptera (Argus). Wounds
by sharp pointed bodies taken in with the food, furnish other
infection—atria, and in their turn ulcers connected with catarrhal or
toxic inflammation may furnish a means of entrance.
Symptoms. These resemble those of catarrhal inflammation, but
are usually attended by greater hyperthermia, and the colicy
symptoms are more marked. There is also greater tenderness in the
epigastrium and left hypochondrium, and icterus is more marked.
When it occurs as an extension of strangles or pyæmia the symptoms
of these affections elsewhere are pathognomonic. When the abscess
bursts into the stomach there may be vomiting of bloody mucus
(hæmatemesis) which is not necessarily followed by a fatal result.
Lesions. As these are seen only in fatal cases, the presence of an
abscess is the characteristic feature. This is usually submucous, or
less frequently subperitoneal, and may vary in size from a hazelnut
upward. The tendency appears to be to open into the stomach,
though it may burst into the peritoneum and cause general infection
of that membrane. In case of parasites, the spiroptera or œstrus larva
may be found in the abcess cavity having a narrow opening into the
stomach. In certain cases the abscess on the pyloric sac has been
found opening into the duodenum. Congestion, thickening,
puckering into rugæ and laceration of the adjacent mucosæ may be a
marked feature, a circumscribed catarrhal gastritis complicating the
local phlegmon.
Treatment. This is less hopeful than in catarrhal gastritis, but
should be conducted along the same lines. The same careful diet,
with daily antiseptics and bitters may prove valuable in limiting the
inevitable suppuration, and, if the pus should escape into the
stomach, in healing the lesion. Sulphites of soda, sulphide of
calcium, chamomile, and quinia, are to be commended and pepsin
may be added to secure at once proteid digestion and antisepsis.
Laxatives may be required to counteract constipation or expel
irritants, and these may be combined with the antiseptics already
named or with salol, eucalyptol, sodium salicylate or other non-
poisonous agent of this class.
 TOXIC GASTRITIS IN SOLIPEDS.

Causes: caustics or irritants acting on mucosa, accidently, or maliciously.

Symptoms: colics, pinched face, small rapid pulse, hurried breathing,
hyperthermia, sometimes salivation, color of buccal mucosa, odor, congestion of
tongue, thirst, urination, icterus, albuminuria, analysis of urine or vomited matter.
Lesions: congestion, corrosion, necrosis or ulceration of gastric mucosa,
discoloration. Treatment: antidote, stomach pump, demulcents, coagulants.

Causes. Toxic gastritis in solipeds is peculiar in this that it must be

due to one or other of the more caustic or irritant agents, which act
chemically on the tissues, while those agents that require to be
absorbed to establish a physiological irritation are comparatively
harmless. This depends on the fact that few or none of the poisonous
agents are absorbed by the gastric mucosa of the soliped, and if
ingested they must pass on into the duodenum before they can be
absorbed into the tissues and blood-vessels. Hence the horse is
injured mainly by actual caustics like mercuric chloride, zinc
chloride, ferric or cupric sulphate, the caustic alkalies or earths, or
alkaline carbonates, and the mineral acids. These may be taken
accidently or administered maliciously, or as medicines.
Symptoms. Morbid symptoms vary according to the agent
swallowed. There are colics, anxious countenance, small accelerated
pulse, rapid breathing, hyperthermia, and salivation, especially
marked with mercuric chloride. The buccal mucosa may give
valuable indications, becoming white with muriatic acid, or zinc, or
antimony, or mercuric chloride, yellow with nitric acid, and white
changing to black with sulphuric acid or silver nitrate. Ferric or
cupric sulphate may give their respective colors to the saliva, and the
former will darken the fæces.
The mouth is usually dry, hot, and clammy, and the edges of the
tongue red. Temperature is usually elevated, yet with tartar emetic it
may be distinctly reduced. Thirst is usually marked, and urination
frequent. Icterus and albuminuria attend on phosphorus poisoning.
When vomiting takes place the appearance or analysis of the matters
rejected, or otherwise of the urine, will often indicate the nature of
the poison.
Lesions. The gastric mucosa is congested and discolored, but the
corrosion and even the ulceration are especially characteristic.
Patches of necrotic mucous membrane may be more or less detached
exposing a deep red submucosa. The coloration otherwise varies;—
white or black with sulphuric acid or silver nitrate; white with
muriatic acid, the caustic alkalies, or zinc chloride; yellow with nitric
acid; or green with salts of copper.
Similar lesions are found on the buccal, œsophagean and intestinal
mucosæ, and even at times on the respiratory.
Treatment. In the treatment of this form of gastritis the first
consideration is to expel, or use an antidote to, the poison. In the
soliped, emetics are useless. The stomach pump or tube may,
however, be applied with good effect in nearly all cases, alternately
throwing in water and drawing it off. Demulcents and coagulants are
also universally applicable. Milk, eggs beaten up in milk, blood
albumen, flaxseed tea, well boiled gruels, or slippery elm bark, may
be used as may be most convenient. Next come the other chemical
antidotes the use of which however demands a previous knowledge
of the poison present. For the mineral acids one can make use of
calcined magnesia, lime water, chalk, or carbonate of soda in weak
solution. For alkalies the appropriate antidote is vinegar. For carbolic
acid, vinegar, alcohol, or failing these a weak solution of soda or oil.
For tartar emetic, gallic or tannic acid. For bichromate of potash or
chromic acid, calcined magnesia, magnesia carbonate, or lime
carbonate. For phosphorus, old oil of turpentine and demulcents—no
oil. For ammonia, vinegar followed by almond, olive or sweet oil. In
case of œdema glottidis, tracheotomy. For copper salts yellow
prussiate of potash, which precipitates the copper in an insoluble
form, and demulcents. For mercuric chloride, demulcent drinks can
be resorted to, there is no other reliable antidote. In all cases after
the evacuation of the stomach and the use of the antidote,
mucilaginous agents must be given freely with morphia or other
anodynes.
 CATARRHAL INFLAMMATION OF THE
FOURTH STOMACH.

Usually a complication. Causes, predisposing, exciting, changes of food or water,

spoiled, frosted or fermented food, green potatoes, caterpillars, nitrogenous food,
irritants. Symptoms: Separation from herd, grinding teeth, eructation, depraved
appetite, fever, tender epigastrium, coated dung, red eyes, fixed or retracted,
dilated, blind eyes, drooping ears, nervous symptoms, reckless unconscious
movements, bellowing, tender skin, tremors. Lesions: Congestion and exudate in
gastric mucosa, hemorrhagic discoloration, desquamation, excess of mucus,
resemblance to rinderpest, Texas fever and malignant catarrh. Treatment: Empty
stomach by bland laxatives, stimulants of peristalsis, calmatives, cold to head,
counter-irritants, enemata, bitters.

This affection is by no means rare in cattle, though it is usually

complicated with inflammation of the first three stomachs or of the
intestines. Nevertheless, when the disease appears to be
concentrated on the fourth stomach mainly, it may well take its name
accordingly.
Causes. A predisposition to the affection occurs in the weak and
debilitated, the overworked oxen, underfed cattle, in those that are
just recovering from a severe illness and in which the gastric
secretions and functions are still poor. The usual exciting cause is
some fault in the food, it may be a sudden change from one kind to
another, and especially from dry to green, or from one kind of green
food to another and more tempting one, as when the animal breaks
into a field of grain which is advancing to maturity. Even a sudden
change of water, as from soft to hard has seemed in our experience to
contribute to its development. Next come spoiled aliments, frosted or
frozen turnips, beets, carrots, potatoes, apples, turnip tops,
fermented grasses, musty hay, sun-exposed potatoes, putrid
vegetables, and caterpillars on cabbages, tree leaves and other
vegetables. Next come products that are highly nitrogenous, like
vetches, alfalfa, sainfoin, clover, and the cakes of linseed, rape and
cotton seed. Irritant plants such as colchicum, digitalis, yew, radish,
etc., have been charged as causative agents.
Symptoms. These are often difficult to distinguish from those of
indigestion or acute lead poisoning, and they vary in different cases
according to the severity of the attack. In the milder cases there may
be loss of appetite and rumination, some tympany, arching of the
back, uneasy movements of the hind limbs and tail, a disposition to
leave the herd, grinding of the teeth, and frequent gaseous
eructations. Some show a depraved appetite, picking up and chewing
various non-alimentary substances. Somewhat more characteristic
are the dry, hot muzzle, the hyperthermia of the body, the tenderness
to pressure of the epigastrium, and the baked appearance and
glistening surface of the fæces. In the more severe forms the
suffering is increased and the nervous system participates in the
disorder. The eyes are congested, fixed or rolled back, the pupils
dilated, the vision appears to be abolished, the ears are pendant, if
tied the subject attempts to get loose, if at liberty he moves steadily
in some one direction regardless of obstacles or dangers, he bellows,
pushes against walls or other obstructions and may seriously injure
himself or others. There is, however, no mischievous purpose, he is
simply impelled to blind motion, and no regard is had to anything
which may be in his way. In some instances the nervous disorder is
manifested by a sensitiveness of the skin, so that the animal shrinks
when handled or pinched along the chine or back. Tremors is
another marked symptom.
Lesions. These consist mainly in congestion and swelling of the
gastric mucosa, which is further covered by a thick layer of mucus.
The folds are especially thickened and discolored, and the seat of
hemorrhagic extravasations (petechiæ) and exudations in spots and
patches. Desquamation of the epithelium may be met with at points
and even distinct ulcers. Exudation in the submucous tissue, and
petechiæ in the peritoneum are common. The condition may bear a
close resemblance to what is seen in rinderpest or malignant catarrh.
Treatment. The first desideratum is the elimination of the irritant
ingesta from the stomach. But for this purpose emetics are useless
and we must fall back on laxatives. Again we are met by the
consideration that the inflamed stomach will neither readily absorb
nor respond to a stimulus. Yet as a rule the viscus is not equally
inflamed throughout, and even the affected parts do not necessarily
have the whole muscular coat involved and paralyzed. We can
therefore hope for a measure of response which once started will
deplete and improve the adjacent and more violently affected parts.
But irritant and drastic purgatives like croton, podophyllin or
gamboge are proscribed as very liable to aggravate the inflammation.
Pilocarpin 3 grs. hypodermically may be given or in default of this, 1
lb. each of Glauber and common salt in not less than six quarts of
water, free access being allowed to pure water until it shall have
operated. Bismuth may also be given as a calmative. Active rubbing
of the abdomen will assist in rousing the stomachs to action, and
hasten the action of the purgative. If there should be any sign of
cerebral disorder, cold water or ice may be applied to the head, and
oil of turpentine, followed by a pulp of the best ground mustard may
be applied to the epigastrium and right hypochondrium. This may be
accompanied and followed by copious enemata, and doses of quinia,
gentian or still better nux vomica three times a day.
 CATARRHAL GASTRITIS IN SWINE.
Definition. Causes, irritants, fermented, putrid swill, spoiled vegetables, irritant
molluscs or larvæ, hot or cold food, alkalies, indigestible food, specific germs and
toxins, parasites. Symptoms: inappetence, restlessness, vomiting, colic,
constipation, diarrhœa, fever, stiffness, tender abdomen, arched back, chill,
plaintive grunting, drooping tail. Lesions. Treatment: change diet, mucilaginous,
milk, protection from saprophytes, change pen, emetic, laxative, calomel, bismuth,
cleanliness, washing.
Definition. Inflammation of the gastric mucosa with mucopurulent
discharge.
Causes. Irritants of various kinds, fermented or putrid swill,
spoiled vegetables, irritant molluscs or larvæ, too hot or too cold
aliment, excess of brine, excess of alkalies, in swill (dishwashings),
indigestible foods of all kinds. The stomach may also be the seat of
catarrhal inflammation in hog cholera, swine plague, rouget,
diphtheritic affections and in the case of gastric parasites, so that it is
very important to distinguish the affections due to simple irritants,
from those dependent on plagues and parasitism.
Symptoms. There is inappetence, vomiting, restlessness and
constant movement, colics, vomiting, constipation or diarrhœa,
hyperthermia, stiffness, tenderness of the abdomen to handling,
arched back, a disposition to hide under the straw, plaintive grunting
when roused, drooping of the tail. The tendency is to a rapid recovery
after the evacuation of the stomach by vomiting, though it may
persist under a continuance of the irritating ingesta.
In these last cases the lesions may closely resemble those of the
contagious affections of the abdomen, but the disease may be
distinguished by its indisposition to spread beyond the herd which is
subjected to the unhealthy dietary.
Treatment. Change the diet to one of pure and easily digestible
materials, soups, mush, fresh whey or buttermilk, boiled farinas or
flax seed, and even fresh grass. If there is violent diarrhœa boiled
milk is often of great value.
 Whatever food is given should be furnished in a vessel into which
the animal can’t get his feet, as these are usually charged with septic
germs which are pathogenic to the diseased stomach, though they
may have started from ordinary saprophytes.
For the same reason it is usually desirable to change the pen, as
the animal grubbing in the ground charges the snout with the same
offensive microbes.
If vomiting is not already established, 30 grains of ipecacuan may
be given, or tepid water may be used to assist the process. If
constipation is present 10 to 30 grains of calomel (according to size)
may be given. In case of diarrhœa a combination of calomel 1 part
and chalk 12 parts, may be given in 3 grain doses, two or three times
a day. Or ½ to 1 drachm nitrate of bismuth may be substituted.
Cleanliness in food and surroundings is among the most important
measures, and if the skin has been filthy, repeated washing with soap
and warm water may be resorted to with great benefit.
 CHRONIC GASTRIC CATARRH IN
SOLIPEDS.
Causes: Debility, age, anæmia, leucæmia, lymph gland, kidney, heart or lung
disease, parasitism, dental or salivary disease, coarse, fibrous food, spoiled food,
putrid water, gastric neoplasms. Symptoms: Impaired appetite, eating lime or
earth, weariness, costiveness, coated dung, tympanies, diarrhœas, fatigue,
sweating, unthrifty hide, pallid mucosæ, emaciation, colics. Lesions: Thickened
right gastric mucosa, discoloration, mucus, petechiæ, opaque granular epithelium,
gastric dilatation. Treatment: Remove causes, diet, watering, exercise, sunshine,
bismuth, pepsin, acids, bitters, electricity, antiseptics, stomachics.
Causes. These are in the main the causes which operate in
producing the acute affection. In most chronic cases they act
continuously on a system rendered susceptible by debility or
otherwise. Among predisposing causes may be named: The debility
of old age, anæmia, leucæmia, chronic diseases of the lymph glands,
of the liver, kidney, heart, or lung, parasitic diseases, diseases of the
jaws, teeth, or salivary glands which interfere with proper
mastication and insalivation. Among exciting causes may be named:
A coarse, fibrous, innutritious diet, a too bulky diet, spoiled fodders
of all kinds, putrid drinking water, and stomach parasites
(spiroptera, œstrus larva). Actual disease of the stomach—papilloma,
cancer, actinomycosis, tumors, and oat-hair or other concretions are
further causes.
Symptoms. Impaired or capricious appetite, a disposition to lick
the walls or earth, or to drink impure water, yawning, constipation
with glossy mucus-covered fæces, and slight tympany, alternating
with diarrhœa, small, accelerated pulse, susceptibility to perspiration
and fatigue on slight exertion, unthrifty skin and hair, hide-bound,
dry, hot mouth, coated tongue, pallor of the mucous membranes,
loss of condition, and increasing weakness. Slight colics may occur at
intervals, and the sluggishness may deepen into stupor or vertigo.
Lesions. The right sac is usually the seat of more or less
hypertrophy of the mucosa, which is thickened, rugose, with patches
of dark red, gray and slate color, and covered with a layer of
tenacious mucus. The surface may show warty-like elevations, or
papillary projections, with here and there patches of blood
extravasation. The epithelial cells are increased, opaque and contain
many fatty granules.
Dilatation of the stomach is not uncommon especially in old
horses, and then the mucosa may be attenuated and smooth.
Hyperthermia may be present, but is so slight that inflammation
cannot be predicated from it and it is difficult to establish a diagnosis
from chronic dyspepsia.
Treatment. It is important to first correct any curable predisposing
disorder, in teeth, jaws, salivary glands, blood, or internal organs, to
carefully regulate feeding, watering and work, to secure as far as
possible an outdoor life, and to employ bitter and other tonics. All
over-exertion or fatigue must be carefully avoided. The food may be
as advised for the more acute affection. Costiveness may be best met
by boiled flaxseed, or in case of necessity by bran mashes, or green
food. The irritation of the stomach may be benefited by nitrate of
bismuth (3 to 4 drs.) and pepsin, and dilute muriatic acid with each
meal are often of value. Nux Vomica (10 to 25 grs. twice daily) will
help to restore the lost tone, and a current of electricity may be sent
through the epigastrium daily. As alternatives, sulphate of quinia or
gentian may replace the nux, and salol or salicylate of bismuth may
take the place of the nitrate. Bicarbonate of soda in ½ dr. doses,
common salt in ½ oz. doses, and fennel in ½ oz. doses are
sometimes useful in re-establishing gastric functions.
 CHRONIC GASTRITIS IN RUMINANTS.
Causes: As in acute form, parasites, gravid womb, insufficient ration, overwork,
exhaustive milking, chronic diseases. Symptoms: deranged appetite, rumination,
pica, eructations, regurgitations, tympanies, colics after feeding, coated dung,
diarrhœa, fever, hot clammy mouth, sunken eyes, small weak pulse, palpitations,
emaciation, weakness, tender hypochondrium. Lesions: hypertrophy of gastric
mucosa, granular epithelium. Treatment: tonic regimen, diet, green food, roots,
sunshine, bismuth, salol, strychnia, pepsin, muriatic acid, common salt, counter-
irritants.
Causes. These are in the main the causes of the acute affection.
There may, however, be special persistent factors like parasites
(strongylus contortus and filicollis, spiroptera) in the stomach, the
pressure of a gravid womb, an alimentation deficient in lime or
phosphorus, overwork, exhausting milking, or chronic disease of
important organs (heart, liver, lung, kidney).
Symptoms. These are indefinite and not easily distinguished from
those of disorders of the third stomach. There is impaired or
capricious appetite, a disposition to eat lime, earth, and all sorts of
non-alimentary objects, rumination is rare or altogether suspended,
efforts to regurgitate are ineffectual, or result in gaseous eructations
only, there are tympanies and abdominal pains especially after
feeding, and constipation with a firm glazed appearance of any fæces
passed, may alternate for a short time with diarrhœa. The mouth is
hot and clammy, the eyes sunken and semi-closed, the pulse small
and weak, though the heart may palpitate, and there is a constantly
progressive emaciation and prostration. Among the more
characteristic symptoms are tenderness of the right hypochondrium
to manipulation and percussion, and the presence of slight
hyperthermia.
Lesions. The changes consist mainly in hypertrophy of the gastric
mucosa, with changes in the epithelium and submucosa such as are
already described in the horse. The pyloric region suffers most, and
here ulcers are not at all uncommon.
Treatment. The main aim must be to remove the causes, and to
build up the general health, so that the patient may rise above the
debilitating conditions. More is to be expected from the change of
diet to green food, roots, mashes, etc., and an outdoor life than from
the action of medicines, which are liable to disappear by absorption
in the first three stomachs, so that they can only act on the fourth
through the system at large. Yet benefit may be expected from the
use of nitrate of bismuth, and salol, as calmatives and antiferments,
nux vomica as a tonic and even from pepsin and muriatic acid as
digestive agents. The two last are not dependent on the fourth
stomach for their activity but will digest the contents more or less in
the first three, and the finely disintegrated and partly peptonized
ingesta coming to the fourth stomach in a less irritating, and less
fermentescible condition, lessens the work demanded of that organ
and gives a better opportunity for recuperation. Small doses of
common salt and one or other of the carminative seeds may be
added. The application of mustard or oil of turpentine to the right
hypochondrium will sometimes assist in giving a better tone to the
organ.
 CHRONIC GASTRITIS IN SWINE.

Causes. Symptoms: inappetence, dullness, arched back, colic, irregular bowels,

fever, emaciation. Treatment: diet, green food, milk, mashes, cleanliness, bismuth,
salol, sodium bicarbonate, strychnia, pepsin, muriatic acid, sunshine, washing.

Causes. These are like those producing the acute affection which
may easily merge into this by a continuation of such causes.
The symptoms too are alike. Inappetence, dullness, prostration,
arched back, vomiting, colic, constipation, with alternating diarrhœa.
There is hyperthermia with hot dry snout, thirst, increasing
emaciation, and anæmia.
Treatment. An entire change of diet, to green food, roots, fresh
milk, and soft mashes in limited quantity. Allow pure water freely.
Adopt all precautions against contamination of the food by the feet
or snout. The stomach may be quieted by oxide of bismuth (20 grs.)
or salol (10 grs.) two or three times daily, and the tone and secretions
of the stomach may be stimulated by bicarbonate of soda (1 dr.) and
nux vomica (1 to 2 grs.) thrice daily. In addition pepsin and muriatic
acid may be given with each meal in proportion adapted to its
amount. A life in the open air, and an occasional soapy wash will do
much to restore healthy gastric functions.
 CHRONIC GASTRITIS IN THE DOG.
Causes: faults in diet, musty food, foreign bodies, poisons, lack of sunshine,
retained fæces, parasites, ill health, chronic diseases, icy bath, septic drink.
Symptoms: irregular appetite and bowels, fever, foul breath, red tongue, tartar on
teeth, dullness, prostration, vomiting of mucus or bile, tender epigastrium, arched
back, fœtid stools, emaciation. Treatment: regulate diet, sunshine, pure water,
scraped muscle, soups without fat, antiseptics, calomel, pepsin, muriatic acid,
strychnia.
Causes. The irregularity and variability of the food, overfeeding,
highly spiced foods, putrid or spoiled food, musty food, the
swallowing of pieces of bone, and of indigestible bodies, the
consumption of poisons, the absence of open air exercise, the
compulsory suspension of defecation in house dogs, and the
presence in the stomach of worms (spiroptera, strongylus), are
among the common causes of the affection. As in other animals, ill
health, debility, lack of general tone, and chronic diseases of
important organs (liver, kidney, heart, lungs) must be taken into
account. The plunging into cold water when heated and the licking of
septic water must also be named.
Symptoms. Appetite is poor or irregular, the nose dry and hot, the
mouth fœtid, the tongue reddened around the borders and furred on
its dorsum, the teeth coated with tartar, the animal dull and
prostrate, vomits frequently a glairy mucus mixed with alimentary
matters or yellow with bile, and there is constipation alternating with
diarrhœa. The epigastrium is tender to the touch, the back arched,
the fæces glazed with mucus or streaked with blood, and offensive in
odor. Emaciation advances rapidly and death may occur from
marasmus.
Treatment. Adopt the same general plan of treatment. Stop all
offensive and irritating food, give regular outdoor exercise, free
access to pure water, and every facility to attend to the calls of
nature. Give plain easily digestible food in small amount. In the
worst cases pulped or scraped raw meat, in the less severe mush, or
well-prepared soups with the fat skimmed off, and bread added.
Check the irritant fermentations in the stomach by salol, bismuth,
salicylate of bismuth, or naphthol. In case of constipation give 8 to 10
grs. calomel. Then assist digestion by pepsin (5 grs.) and
hydrochloric acid (10 drops) in water with each meal. If the
bitterness is not an objection 1 gr. nux vomica may also be added.
 ULCERATION OF THE STOMACH.

Causes: peptic digestion, paresis, caustics, irritants, acids, alkalies, salts,

mechanical irritants, hot food, parasites, thrombosis, embolism, specific disease
poisons, aneurism, tumors, infective growths, nervous disorder, debility, toxins of
diphtheria, staphylococcus, etc. Symptoms: slight colics, tympany, emaciation,
vomiting blood, tender epigastrium, dark or bloody stools, irregular bowels; in
carnivora abdominal decubitus, arched back, bloody, mucous, acid vomit, colics
after meals. Lesions: in horse erosions, ulcers, parasites, neoplasms,
discolorations, extravasations; in cattle and dogs on folds, nature of ulcer.
Treatment: restricted, digestible diet, lavage, anodynes, bismuth, antacids,
antiseptics, salol, naphthol, chloral, pure water.

Causes. Gastric ulcers may arise from quite a variety of causes

which determine necrotic conditions of the mucosa and the gradual
invasion of the resulting lesion by destructive microbes. One of the
simplest factors is the peptic juice, the stomach, being struck with
paresis (in inflammation, fever, nervous disorder), while containing
a quantity of its secretion, undergoes an autodigestion which affects
particularly the lowest (pyloric) portion, toward which the liquid
gravitates, and the free edges of the folds which are the most exposed
to its action.
The swallowing of irritant and caustic agents (the mineral acids or
alkalies, mercuric chloride, tartar emetic, antimony chloride, Paris
green, arsenious acid, etc.) by corroding or causing destructive
inflammation of the exposed mucous membrane may similarly
operate. This is especially the case with monogastric animals, (horse,
pig, dog, cat), as in the ruminants such agents tend to be diluted in
the first three stomachs and rendered more harmless.
Mechanical irritants may cause the lesion and infection atrium in
any of the domestic animals, pins, needles, nails, pieces of wire and
other sharp pointed bodies being swallowed by horse and ox, and
small stones, pieces of bone, and all sorts of irritant objects picked up
by the puppy or rabid dog.
Cooked food swallowed hurriedly at too high a temperature is
especially liable to start necrotic changes in the single stomach of
horse, pig or dog, the ruminant being in a measure protected by the
food passing first into the rumen.
The wounds caused by gastric parasites may become the starting
points of molecular degeneration and ulceration. In the horse the
spiroptera megastoma, s. microstoma, and the larvæ of the various
œstri; in cattle and sheep the strongylus contortus, s. convulutus, s.
filicollis and s. vicarius; in swine the spiroptera strongylina,
Simondsia paradoxa, and gnathostoma hispida; in dogs spiroptera
sanguinolenta, and in cats the ollulanus tricuspis act in this way.
Gastric catarrh debilitates the affected mucosa and lays it open to
necrotic microbian infection especially in the pyloric sac and on the
summit of the folds.
Interruption of the local circulation in the deeper parts of the
mucosa as in inflammation and capillary thrombosis, arterial
embolism, venous thrombosis, may lead to local sloughing and
ulcerous infection. This may be seen in the petechial fever of the
horse, malignant catarrh, rinderpest, and anthrax in cattle and
sheep, and in canine distemper in dogs. Vogel found ulcers resulting
from a gastric aneurism in the dog.
Tumors and infective growths in the walls of the stomach may
prove an occasion of ulceration. Thus sarcoma, epithelioma,
actinomycosis and tubercle may be the primary morbid lesion in
different cases.
Gastric ulcers have also been attributed to morbid nervous
influences as in dogs they have been found associated with lesions of
the dorsal myelon, and the corpora quadrigemini, and faradisation of
the vagus has apparently led to their production.
General constitutional debility has been alleged as a factor, and
experimentally in dogs, the hypodermic or intravenous injection of
various microbes or their toxins (diphtheritic toxin, Enriquez and
Hallion, staphylococci, Panum, Lebert, Letulle, and a bacillus of
dysentery in man, Chantemesse and Widal), have produced gastric
ulcers.