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    Feane Lamasan
    This document discusses forecasting, which involves making predictions about future values of variables to help with planning and decision making. It outlines the forecasting process, which includes determining the purpose, time horizon, technique, data analysis, forecast, and monitoring. Common forecast types are judgmental, time series, and associative models. Time series forecasts use historical data patterns to predict the future, while judgmental forecasts incorporate subjective inputs. The document also covers elements of a good forecast, forecast variations, naive forecasts, and averaging techniques like moving averages.

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    OpRes Reviewer

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    Feane Lamasan
    14 views2 pages
    This document discusses forecasting, which involves making predictions about future values of variables to help with planning and decision making. It outlines the forecasting process, which includes determining the purpose, time horizon, technique, data analysis, forecast, and monitoring. Common forecast types are judgmental, time series, and associative models. Time series forecasts use historical data patterns to predict the future, while judgmental forecasts incorporate subjective inputs. The document also covers elements of a good forecast, forecast variations, naive forecasts, and averaging techniques like moving averages.

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    This document discusses forecasting, which involves making predictions about future values of variables to help with planning and decision making. It outlines the forecasting process, which includes determining the purpose, time horizon, technique, data analysis, forecast, and monitoring. Common forecast types are judgmental, time series, and associative models. Time series forecasts use historical data patterns to predict the future, while judgmental forecasts incorporate subjective inputs. The document also covers elements of a good forecast, forecast variations, naive forecasts, and averaging techniques like moving averages.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    14 views2 pages

    OpRes Reviewer

    Uploaded by

    Feane Lamasan
    This document discusses forecasting, which involves making predictions about future values of variables to help with planning and decision making. It outlines the forecasting process, which includes determining the purpose, time horizon, technique, data analysis, forecast, and monitoring. Common forecast types are judgmental, time series, and associative models. Time series forecasts use historical data patterns to predict the future, while judgmental forecasts incorporate subjective inputs. The document also covers elements of a good forecast, forecast variations, naive forecasts, and averaging techniques like moving averages.

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    of 2

    Forecasting: 3.

    Select a forecasting technique


    4. Obtain, clean and analyze data
    Forecast:
    5. Make the forecast
    - Statement about the future value 6. Monitor the forecast
    of a variable of interest, demand
    Types of Forecast:
    - Used to make informed decisions
    - Long-range or Short-range  Judgmental – uses
    - Affect decisions and activities subjective inputs
    throughout an organization - executive options
     Accounting – cost/ profit - sales force opinions
    estimates - consumer surveys
     Finance – cash flow and - outside opinion
    funding - delphi method (opinions of
     Human Resources – hiring/ managers and staff, achieves
    recruiting/ training a consensus forecast)
     Marketing – pricing,  Time series – uses historical
    promotion, strategy data assuming the future will
     MIS – ITAS systems, services be like the past
     Operations – schedules, - trend – long-term movement
    MRP, workloads in data
     Product/ service design – new - seasonality – short-term
    products and services regular variations in data
    - Assumes causal system (past => - cycle – wavelike variations
    future) of more than one year’s
    - Rarely perfect because of duration
    randomness - irregular variations – by
    - More accurate for groups vs. unusual circumstances
    individuals - random variations – by
    - Accuracy decreases as time chance
    horizon increases  Associative models – uses
    explanatory variables to
    Elements of a Good Forecast: predict the future
     Timely Forecast Variations:
     Reliable
     Accurate  Trend
     Meaningful  Cycles
     Written  Seasonal variations
     Easy to use Naïve Forecasts – forecast of
    Steps in Forecasting Process: any period equals the previous
    period’s actual value
    1. Determine purpose of forecast
    2. Establish a time horizon - simple to use
    - virtually no cost
    - quick and easy to prepare
    - data analysis is nonexistent
    - easily understandable
    - cannot provide high accuracy
    - can be a standard for accuracy
    Techniques for Averaging:
     Moving average – technique
    that averages a number of
    recent actual values, updated
    as new values become
    available.

     Weighted moving average –
    more recent values in a series
    are given more weight in
    computing the forecast
     Exponential smoothing

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