Market Research – Part 2

Triangulating the source of all errors away! Or Not?

For most, triangulation could mean average of different sources and for some, it means getting two independent sources which are giving you same data in the ballpark. But to me, it is to do as much with heuristics as with statistics. Why do I say that? After you ensure that you have independent multiple sources of information, you can do a lot of quick sanity checks. If the report is a year old, then it started out with some numbers which are historic shipments/data by now, but were forecasts for them, then – you can do a quick check to see how way off each source of data was with respect to the shipment information you have. Next step, check what is the data range, is it within 0.1%, 1%, 10% or 100%? If the error is in the range of 0.1-1%, I would either take the more conservative number or average out or weigh the source with more trustworthy historical numbers, higher. Beyond the 100% range, either we are dealing with different market definitions or some fundamental error in accounting method, need to determine which source is way off (might need some conference calls with analysts..or a third source to support one of the previous data sources) but beyond that you have to chose one and I would again go with the conservative number, unless I will have either forecasting or ramp up production related issues to deal with later. Now, if the error is in the 10% range, I would average out the numbers from the different data sources (if all other sanity checks are a pass), because this is most probably related to differences in assumptions and we are safer in the middle here. Comments, feedback, thoughts are welcome…

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