Data visualization can be used to help improve forecasts.

Example: Recall the section “Flexible Budget—A Case Study” presented in the chapter. Flexible budgeting is useful because it enables managers to evaluate performance in light of changing conditions. But the ability to react quickly to changing conditions is even more important. For example, consider the following charts, which present quarterly data for Honda sales in four regional markets.

While the number of vehicles sold differs by region, the trends shown are used in forecasting sales and accompanying budgets. In examining the above charts, it appears that some regions will likely be more difficult to budget than others. For example, sales in Europe are the most volatile, as shown by the changing heights of the columns, and Japan is somewhat erratic. On the other hand, North America’s and Asia’s upward trends are much more consistent, making it easier to forecast sales in those regions. For this case, you will use Excel’s Forecast tool to create and analyze line charts. You will also consider qualitative factors that might affect decisions based on this data. 

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