GOOD MORNING EVERY ONE, BEFORE I START MY DISCUSSION.

I WOULD LIKE TO
INTRODUCE MYSELF, I’M MARY ROSE GARDOCE FOR TODAY REPORTER.
SLIDE 2
THE TOPIC THAT I WOULD BE DISCUSSING ABOUT FORECASTING THAT INCLUDE
ALSO THE OVERVIEW AND DEFINITION OF FORECASTING.
SLIDE 3
Forecasting assures a business with a defined plan na ma overcome ang risks and
contingencies that might otherwise affect revenue and financial allocation.
Forecasting ga allows man businesses para ma identify kag control factors in
operations that can create short and long term impacts.
For example, consider a retail clothes store. Examining previous sales data, they
may see that there is an increase in demand for winter jackets every November
when the temperature cools. This historical pattern may be utilized to project
future demand for winter coats, allowing the retailer to prepare by stockpiling
inventory, altering pricing tactics, and arranging promotions to meet expected
demand.
Similarly, a software company might analyze past subscription renewals and
customer churn rates to forecast future demand for their services. If they notice a
seasonal pattern where subscription renewals drop during certain months, they
can proactively implement retention strategies or targeted marketing campaigns
to mitigate potential revenue loss.
In both examples, the businesses are leveraging historical data to predict future
demand, enabling them to optimize their operations and make informed decisions
to meet customer needs efficiently. However, it's important to recognize that
while past trends provide valuable insights, external factors and unexpected
events can also influence demand, so forecasting methods should be flexible and
continuously refined to adapt to changing market conditions.
Also Forecasting maka bulig mag set goals kag mag plan ahead
By having these goals, companies can better evaluate progress. maka allows saila
na ma adapt business processes kung diin kinanlan icontinue on the desired path.
SLIDE 5 QUALITATIVE TECHNIQUES
Two more common qualitative methods available are the Collective Opinion
Method and Delphi Technique.
READ THE SLIDE
The Collective Opinion Method is a qualitative forecasting approach where the
insights and opinions of individuals within and sometimes outside an organization
are gathered to predict future demand for a specific product or service. This
method relies on the premise that individuals involved in marketing, sales, or with
industry expertise possess valuable insights into future consumer behavior.
In simpler terms, the organization essentially crowdsources predictions from its
own employees and possibly external consultants to form a collective
understanding of future market trends and demand.
For instance, let's consider a beverage company looking to forecast demand for a
new line of flavored water. They might gather input from various departments
within the company such as marketing, sales, product development, and finance.
Marketing and sales staff could provide insights based on consumer trends,
promotional strategies, and customer feedback. Product development teams
might offer insights into emerging flavor preferences or innovations in packaging.
Additionally, the company might seek input from external consultants who
specialize in beverage industry trends.
By compiling and analyzing this collective input, the beverage company can
develop a forecast for the demand of their new flavored water line. This method
allows them to leverage the diverse perspectives and expertise within and outside
the organization to make more informed predictions about future market
demand.
However, it's essential to recognize that while the Collective Opinion Method can
provide valuable insights, it may also be subject to biases or limitations inherent in
individual perspectives. Therefore, careful consideration and validation of the
gathered opinions are necessary to ensure the reliability and accuracy of the
forecasts.
SLIDE 6 DELPHI
The Delphi Technique, a qualitative forecasting method, begins with distributing
questionnaires to a panel of experts to gather their initial forecasts on a specific
topic. These responses are then compiled and synthesized by an organized
committee. Subsequently, a second questionnaire is developed, summarizing the
findings of the initial round and seeking additional input from the experts. This
iterative process continues for multiple rounds, allowing experts to revise their
forecasts, discuss differences, and gradually converge towards a consensus.
Ultimately, the Delphi Technique aims to harness the collective wisdom of the
experts involved to arrive at a robust and informed projection of future trends or
outcomes.
SLIDE 7,8,9,10,11
READ SLIDE
Quantitative forecasting methods operate under the assumption that the factors
influencing demand in the past will continue to influence demand in the future.
These methods categorize demand patterns into different types to help predict
future trends more accurately.
1. Linear Trend: A linear trend refers to a steady increase or decrease in demand
over time. This pattern suggests that demand is changing at a consistent rate over
a period. For example, if a software company observes a linear increase in the
number of users subscribing to their service each month, they can use this trend
to predict future growth and allocate resources accordingly.
2. Cyclical: Cyclical demand patterns involve recurring fluctuations in demand that
occur over a longer period, often tied to economic cycles or industry-specific
trends. For instance, the demand for construction materials may experience
cyclical fluctuations corresponding to the boom and bust cycles of the real estate
market. Recognizing these cyclical patterns allows businesses to anticipate periods
of high and low demand and adjust their strategies accordingly.
3. Seasonal: Seasonal demand patterns occur when demand for a product or
service varies predictably based on the time of year, holidays, or seasonal events.
For example, retailers typically experience increased demand for winter clothing
during the colder months and higher demand for outdoor equipment during the
summer. By identifying and accounting for these seasonal fluctuations, businesses
can optimize inventory levels, staffing, and marketing efforts to meet consumer
demand during peak periods.
4. Constant Demand: Constant demand patterns indicate a stable and consistent
level of demand over time, with minimal fluctuations. This pattern is rare but can
occur for certain staple goods or essential services where demand remains
relatively steady regardless of external factors. For instance, the demand for basic
household items like bread or milk may exhibit a constant pattern due to their
everyday necessity.
Understanding these demand patterns allows businesses to select the most
appropriate forecasting methods and models to predict future demand accurately.
By analyzing historical data and identifying underlying patterns, businesses can
make informed decisions about production, inventory management, and resource
allocation to meet customer needs effectively.
SLIDE 12 TIME SERIES ANALYSIS
Time series analysis is a method used to analyze data points collected at regular
intervals over a defined period of time. It involves examining the patterns, trends,
and relationships within the dataset to make predictions or uncover insights about
future behavior.
My understanding of time series analysis is that it focuses on understanding how
data points change over time, allowing analysts to identify underlying patterns,
seasonal variations, and long-term trends. This method is particularly useful for
forecasting future values based on historical data.
For example, let's consider a retail store that wants to forecast monthly sales for
the next year. They collect data on monthly sales figures over the past five years.
By applying time series analysis techniques, such as moving averages or
exponential smoothing, they can identify seasonal trends, such as increased sales
during holiday seasons, as well as long-term growth or decline patterns.
Using this analysis, the retail store can then generate forecasts for future monthly
sales based on historical patterns. This information helps the store make decisions
about inventory management, staffing levels, and marketing strategies to meet
anticipated demand and maximize revenue.
Overall, time series analysis provides a powerful framework for understanding and
predicting future outcomes based on patterns observed in historical data, making
it a valuable tool for businesses in various industries.
SLIDE 13 SIMPLE AVERAGE METHOD
The Simple Average Method, a straightforward forecasting technique, is
particularly suitable for scenarios characterized by a constant demand process. It
involves computing the average of historical data points to predict future values.
For instance, in a bakery's context, this method can be applied to forecast daily
bread sales for the upcoming week by summing up the total loaves sold over the
past month and dividing it by the number of days. This approach assumes that
past performance serves as a reliable indicator of future outcomes, making it
useful when demand remains stable over time. Despite its simplicity, the Simple
Average Method provides a quick and accessible way to generate forecasts, aiding
businesses in making informed decisions regarding resource allocation and
inventory management.
(SLIDE 13) INCASE IN NEED FOR SUMASUMA
The Simple Average Method is a straightforward technique used for
forecasting when there is a constant demand process, meaning that the demand
remains relatively stable over time. It involves calculating the average of
historical data points to predict future values.
 My understanding of this method is that it assumes past performance is
indicative of future outcomes, making it suitable for situations where there is no
significant trend or seasonality in the data.
For example, let's say a small bakery wants to forecast its daily bread sales
for the upcoming week. They gather data on the number of bread loaves sold
each day over the past month:
- Monday: 50 loaves
- Tuesday: 55 loaves
- Wednesday: 52 loaves
- Thursday: 48 loaves
- Friday: 50 loaves
- Saturday: 52 loaves
- Sunday: 49 loaves
"To use the Simple Average Method, the bakery would sum up the total
number of loaves sold over the past month, represented by the sum of X sub t,
and divide it by the total number of days, denoted as N, which is 7 in this case."
Xₜ = (50 + 55 + 52 + 48 + 50 + 52 + 49) / 7
= 356 / 7
≈ 50.86 loaves
("The sum of X sub t equals the sum of 50, 55, 52, 48, 50, 52, and 49 divided by
7, which equals 356 divided by 7, approximately equal to 50.86 loaves.")
So, the bakery's simple average daily sales forecast for the upcoming week
would be approximately 50.86 loaves per day.
While the Simple Average Method is easy to calculate and understand, it
may not account for fluctuations or underlying trends in the data. Therefore, it's
most suitable for situations where demand is relatively stable and consistent
over time.