Forecasting Paper
Abstract Forecasts are extensively used to support business decisions and direct the work of operations managers. The two major types of forecasts are qualitative and quantitative. Within each of these types are multiple methods and models. Qualitative forecasts are based upon subjective data. Quantitative forecasts are derived from objective data. Both methods are not suitable for all situations and circumstances. Each has inherent strengths and weaknesses. The forecaster must understand the strengths and shortcomings of each method and choose appropriately. One example of forecasting is the United States Marine Corps use of forecasting techniques, both qualitative and quantitative, to predict ammunition requirements.
Forecasting Defined Forecasting is "A statement about the future" (Anonymous, 2005). Operations management is designed to support forecasted performances and events. Specifically, operations managers allocate personnel, time, and resources in order to meet the demands of forecasts. The most successful companies achieve their results by assuming just such a proactive vice reactive posture.
While forecasting is widely used, it does not fit into a standard one size fits all model. Multiple proven methods and models exist. In this paper we will examine, compare, and contrast the two most commonly used methods, qualitative and quantitative forecasting. Lastly, as a case study, we will examine how the United States Marine Corps forecasts its fiscal year ammunition requirements.
Qualitative Forecasting Qualitative forecasts are the least scientific. They are based exclusively upon subjective data, such as opinions and estimates (Aquilano, Chase & Jacobs, 2005). Within the realm of qualitative forecasting are multiple techniques and measures. These are: grass roots, market research, panel consensus, historical analogy, and the Delphi method (Aquilano, Chase & Jacobs, 2005).
Grass Roots Grass roots can best be described as a
Forecasting Defined Forecasting is "A statement about the future" (Anonymous, 2005). Operations management is designed to support forecasted performances and events. Specifically, operations managers allocate personnel, time, and resources in order to meet the demands of forecasts. The most successful companies achieve their results by assuming just such a proactive vice reactive posture.
While forecasting is widely used, it does not fit into a standard one size fits all model. Multiple proven methods and models exist. In this paper we will examine, compare, and contrast the two most commonly used methods, qualitative and quantitative forecasting. Lastly, as a case study, we will examine how the United States Marine Corps forecasts its fiscal year ammunition requirements.
Qualitative Forecasting Qualitative forecasts are the least scientific. They are based exclusively upon subjective data, such as opinions and estimates (Aquilano, Chase & Jacobs, 2005). Within the realm of qualitative forecasting are multiple techniques and measures. These are: grass roots, market research, panel consensus, historical analogy, and the Delphi method (Aquilano, Chase & Jacobs, 2005).
Grass Roots Grass roots can best be described as a
References: Aquilano, N. J., Chase, R. B. & Jacobs, F. R. (2005). Operations Management for Competitive Advantage. 11th ed. New York: McGraw-Hill. Anonymous (2005). Definition of forecasting. Retrieved on August 14, 2005 from http://www.thefreedictionary.com/forecasting Anonymous (n. d.). Forecasting. Retrieved on August 16, 2005 from www.luc.edu/faculty/mvanoye/480/01spr/forecast-lec.ppt