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    The document discusses forecasting methods. It defines forecasting as predicting future events based on historical data. Forecasts are classified as short, medium, or long range based on their time horizon. Good forecasts are timely, reliable, accurate, meaningful, written, and easy to understand. Qualitative models like the Delphi technique and nominal group technique rely on expert opinions, while quantitative models use historical data in methods like time series analysis, regression analysis, and economic modeling. The document outlines different forecasting techniques and how to select the appropriate model based on cost and required accuracy.

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    The document discusses forecasting methods. It defines forecasting as predicting future events based on historical data. Forecasts are classified as short, medium, or long range based on their time horizon. Good forecasts are timely, reliable, accurate, meaningful, written, and easy to understand. Qualitative models like the Delphi technique and nominal group technique rely on expert opinions, while quantitative models use historical data in methods like time series analysis, regression analysis, and economic modeling. The document outlines different forecasting techniques and how to select the appropriate model based on cost and required accuracy.

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    25 views9 pages

    Forecasting: Bikram Adhikari MBA II Semester

    Uploaded by

    bikram
    The document discusses forecasting methods. It defines forecasting as predicting future events based on historical data. Forecasts are classified as short, medium, or long range based on their time horizon. Good forecasts are timely, reliable, accurate, meaningful, written, and easy to understand. Qualitative models like the Delphi technique and nominal group technique rely on expert opinions, while quantitative models use historical data in methods like time series analysis, regression analysis, and economic modeling. The document outlines different forecasting techniques and how to select the appropriate model based on cost and required accuracy.

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    of 9

    FORECASTING

    पूर्वानुमान

    Bikram Adhikari
    MBA II Semester
    DEFINITION
    • Science of predicting future event based on the historical data.
    • Forecasts are possible only when past data exist.
    • Used for business operations as well as by economist and social scientists.
    • Based on time horizon, forecasts are classified in three categories:
    • Short range forecast: less than 3 months. Used for job assignments and production levels.
    • Medium range forecast: time period up to 3 years. Used in sales, production planning and
    budgeting.
    • Long range forecast: more than 3 years. Used in planning for new products, research and
    development.
    QUALITIES OF GOOD FORECASTING
    • Timely
    • Reliable
    • Accurate
    • Meaningful
    • Written
    • Easy to use and understand
    FORECASTING MODELS OR TECHNIQUES

    Qualitative Models Quantitative Models

    Used where the forecasting time horizon is very


    Used when the data representing the forecast
    large and precise numerical description of are available.
    forecasting variables could be not formulated.

    Favors the personal and work experience. Avoids the personal judgements, instead use the
    data.

    Examples: production of novel etc. Examples: sales forecast for coming year etc.
    TYPES
    Qualitative Models Quantitative Models
    • Delphi Technique 1. Time Series Methods
    • Nominal Group Technique • Naive Approach
    • Historical Data Analysis • Moving Average Method
    • Exponential Smoothing Method
    • Trend Projection
    2. Causal Method
    • Regression Analysis
    • Economic Modeling
    QUALITATIVE MODELS : DELPHI TECHNIQUE
    • Group Process
    • Panel of experts within or without the organization provides written comments
    on the points in questions.
    • Steps:
    • Choose variety of knowledgeable people of different areas.
    • Through a questionnaire, obtain forecast (opinions) from all participants.
    • Summarize the results and redistribute among the participants along with new
    questions.
    • Summarize again, refining forecasts and conditions, and again develop new questions.
    • Distribute the final results to all participants.
    HISTORICAL DATA ANALYSIS
    • Based on historical data

    • Takes account pervious growth or decline rate for determining demand of new product.
    SELECTION CRITERIA OF FORECASTING MODELS
    1. Cost
    2. Accuracy

    • High Cost of implementation and maintenance, provides more accurate forecasts, resulting
    lower operating cost.
    THANK YOU !

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