3...forecasting methods
Download as PPT, PDF26 likes61,216 views
There are three main types of forecasting methods: qualitative, extrapolative, and causal. Qualitative methods rely on expert opinions and are useful for medium to long range forecasting. Extrapolative methods use past historical demand data to identify patterns and extrapolate them into the future. Causal methods use statistical models based on historical demand data and other variables that influence demand. Some specific forecasting techniques mentioned include the Delphi technique, market surveys, scenario writing, moving averages, weighted moving averages, exponential smoothing, regression analysis, and econometric methods.
3...forecasting methods
- 1. Presented by Nazrin Jamal 3rd Sem IF CUSAT
- 2. Method or technique for estimating many future aspects of a business or other operation. It is used in the practice of customer demand planning in every day business forecasting for manufacturing companies.
- 3. There are three types of forecasting 1.Qualitative or Judgmental methods 2.Extrapolative or Time series methods 3.Causal or Explanatory methods
- 4. Rely on experts or managers opinion in making prediction for the future. Useful for medium to long range forecasting tasks. Provide a basis for some important decisions.
- 5. Three important Qualitative methods are :- Delphi Technique - Develop forecast through group consensus. Market Surveys – Involves the use of questionnaires, consumer panels & tests of new products & services. Scenario Writing - process of analyzing possible future events by considering alternative possible outcomes.
- 6. Use past history of demand. Comprised of four separate components: trend component, cyclical component, seasonal component, and irregular component. The objective of this method is to identify the pattern in historic data & extrapolate this for future.
- 7. TYPES OF EXTRAPOLATIVE METHODS Moving Average Method - average of demands occurring in several of the most recent periods. Weighted Moving Average - allows for varying weighting of old demands. Exponential Smoothing – exponentially decreases the weighting of old demands.
- 8. A statistical forecasting model based on historical demand data as well as on variables believed to influence demand.
- 9. There are two types of Causal forecasting methods Regression analysis - a functional relationship is established between variables from the historical data and then used to forecast dependent variable values. Econometric method – an extension of regression analysis and include a system of simultaneous regression equations.
- 10. THANK YOU