Eight Steps to Forecasting
• Determine the use of the forecast
□ What objective are we trying to obtain?
• Select the items to be forecast
• Determine the time horizon of the forecast
□ Short time horizon – 1 to 30 days
□ Medium time horizon – 1 to 12 months
□ Long time horizon – more than 1 year
• Select the forecasting model(s)
|Description |Qualitative Approach |Quantitative Approach | |Applicability |Used when situation is vague & little data exist |Used when situation is stable & historical data | | |(e.g., new products and technologies) |exist | | | |(e.g. existing products, current technology) | |Considerations |Involves intuition and experience |Involves mathematical techniques | |Techniques |Jury of executive opinion |Time series models | | |Sales force composite |Causal models | | |Delphi method | | | |Consumer market survey | |
Qualitative Forecasting Methods
Your company may wish to try any of the qualitative forecasting methods below if you do not have historical data on your products' sales. |Qualitative Method |Description | |Jury of executive opinion |The opinions of a small group of high-level managers are pooled and together they...
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