Qualitative Forecasting
QUALITATIVE FORECASTING METHODS
Qualitative forecasting methods are based on educated opinions of appropriate persons
1. Delphi method: forecast is developed by a panel of experts who anonymously answer a series of questions; responses are fed back to panel members who then may change their original responses a- very time consuming and expensive b- new groupware makes this process much more feasible
2. Market research: panels, questionnaires, test markets, surveys, etc.
3. Product life-cycle analogy: forecasts based on life-cycles of similar products, services, or processes
4. Expert judgement: by management, sales force, or other knowledgeable persons
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QUANTITATIVE FORECASTING METHODS
TIME SERIES FORECASTING METHODS
Time series forecasting methods are based on analysis of historical data (time series: a set of observations measured at successive times or over successive periods). They make the assumption that past patterns in data can be used to forecast future data points.
1. Moving averages (simple moving average, weighted moving average): forecast is based on arithmetic average of a given number of past data points
2. Exponential smoothing (single exponential smoothing, double exponential smoothing) - a type of weighted moving average that allows inclusion of trends, etc.
3. Mathematical models (trend lines, log-linear models, Fourier series, etc.) - linear or non-linear models fitted to time-series data, usually by regression methods
4. Box-Jenkins methods: autocorrelation methods used to identify underlying time series and to fit the "best" model
COMPONENTS OF TIME SERIES DEMAND
1. Average: the mean of
Qualitative forecasting methods are based on educated opinions of appropriate persons
1. Delphi method: forecast is developed by a panel of experts who anonymously answer a series of questions; responses are fed back to panel members who then may change their original responses a- very time consuming and expensive b- new groupware makes this process much more feasible
2. Market research: panels, questionnaires, test markets, surveys, etc.
3. Product life-cycle analogy: forecasts based on life-cycles of similar products, services, or processes
4. Expert judgement: by management, sales force, or other knowledgeable persons
[pic]
QUANTITATIVE FORECASTING METHODS
TIME SERIES FORECASTING METHODS
Time series forecasting methods are based on analysis of historical data (time series: a set of observations measured at successive times or over successive periods). They make the assumption that past patterns in data can be used to forecast future data points.
1. Moving averages (simple moving average, weighted moving average): forecast is based on arithmetic average of a given number of past data points
2. Exponential smoothing (single exponential smoothing, double exponential smoothing) - a type of weighted moving average that allows inclusion of trends, etc.
3. Mathematical models (trend lines, log-linear models, Fourier series, etc.) - linear or non-linear models fitted to time-series data, usually by regression methods
4. Box-Jenkins methods: autocorrelation methods used to identify underlying time series and to fit the "best" model
COMPONENTS OF TIME SERIES DEMAND
1. Average: the mean of