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    Thomas O'Neal
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    Forecasting is a prediction of what will occur in the future Using past data to predict on the result in the future. There are two types of forecasting models: Qualitative Models Quantitative Models Qualitative - incorporates judgmental and subjective factors into forecast. Time Series Method Naive Whatever happened recently will happen again this time (same time period). Time series method moving average technique that assumes item forecasted will stay steady over time. Technique will smooth out shortterm irregularities in the time series.

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    Forecasting is a prediction of what will occur in the future Using past data to predict on the result in the future. There are two types of forecasting models: Qualitative Models Quantitative Models Qualitative - incorporates judgmental and subjective factors into forecast. Time Series Method Naive Whatever happened recently will happen again this time (same time period). Time series method moving average technique that assumes item forecasted will stay steady over time. Technique will smooth out shortterm irregularities in the time series.

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    141 views12 pages

    Forecasting Methods

    Uploaded by

    Thomas O'Neal
    Forecasting is a prediction of what will occur in the future Using past data to predict on the result in the future. There are two types of forecasting models: Qualitative Models Quantitative Models Qualitative - incorporates judgmental and subjective factors into forecast. Time Series Method Naive Whatever happened recently will happen again this time (same time period). Time series method moving average technique that assumes item forecasted will stay steady over time. Technique will smooth out shortterm irregularities in the time series.

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    Thomas ONeal MAT 540 Quantitative Methods Strayer University

    Forecast is a prediction of what will occur in the future


    Using past data to predict on the result in the future

    Meteorologist Sports Casters Business Managers

    There are two types of Forecasting Models Qualitative Models Quantitative Models

    Qualitative incorporates judgmental & subjective factors into forecast. Delphi method Iterative group process allows experts to make forecasts Participants: decision makers: 5 -10 experts who make the forecast staff personnel: assist by preparing, distributing, collecting, and summarizing a series of questionnaires and survey results respondents: group with valued judgments who provide input to decision makers

    Time Series Method Nave Whatever happened recently will happen again this time (same time period) The model is simple and flexible Attempts to capture seasonal factors at the expense of ignoring trend

    Nave graph
    Wallace Garden - Naive Forecast 25

    20

    15
    Sheds

    Actual Value Nave Forecast 10

    0 February March April May June July Period August September October November December

    Time Series Method Moving Averages Assumes item forecasted will stay steady over time. Technique will smooth out shortterm irregularities in the time series.

    Moving Average
    Three Period Moving Average
    25 20 15

    Value

    Actual Value Forecast 10

    0 1 2 3 4 5 6 Tim e 7 8 9 10 11 12

    Time Series Method Exponential Smoothing Moving average technique that requires little record keeping of past data. Uses a smoothing constant with a value between 0 and 1. (Usual range 0.1 to 0.3)

    Exponential Method
    Wallace Garden Supply
    Forecasting
    Storage Shed Sales

    Exponential Smoothing Period January February March April May June July August September October November December Actual Value 10 12 16 13 17 19 15 20 22 19 21 19 Ft 10 10 10 10 11 11 12 12 13 13 14 15 + + + + + + + + + + + 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 At *( *( *( *( *( *( *( *( *( *( *( 10 12 16 13 17 19 15 20 22 19 21 Ft 10 10 10 11 11 12 12 13 13 14 15 ) ) ) ) ) ) ) ) ) ) ) = = = = = = = = = = = Ft+1 10.000 10.200 10.780 11.002 11.602 12.342 12.607 13.347 14.212 14.691 15.322

    http://www.uoguelph.ca/~dsparlin/forecast.htm http://www.smetoolkit.org/smetoolkit/en/content/ en/416/Demand-Forecasting http://accounting-financialtax.com/2009/04/qualitative-forecasting-methodsand-techniques/ http://www.referenceforbusiness.com/encyclopedi a/Fa-For/Forecasting.htm/ http://economics.sas.upenn.edu/~fdiebold/Teachin g221/fcst5-Slides.pdf/ Introduction to Management Science, Tenth Editon

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