Ch03_FC1 - Copy - FORECASTING I see that you will get an A...

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FORECASTING I see that you will get an A this semester.
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“PAST IS A GOOD REPRESENTATION OF THE FUTURE” WHAT HAPPENED ON OCTOBER 19, 1987??? A POTENTIALLY LETHAL FORECASTING ASSUMPTION
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PREDICTION VS. FORECAST
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PRECISION VS. ACCURACY
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FORECAST IS A QUALITATIVE OR QUANTITATIVE ESTIMATE OF A FUTURE EVENT MADE USING SCIENTIFIC/ STATISTICAL MODELS AND METHODOLOGIES. WHAT IS A FORECAST?
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Forecasting Assumes causal system: past ==> future Forecasts rarely perfect because of randomness Forecasts more accurate for groups vs. individuals Forecast accuracy decreases as time horizon increases
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Steps in the Forecasting Process Step 1 Determine purpose of forecast Step 2 Establish a time horizon Step 3 Select a forecasting technique Step 4 Gather and analyze data Step 5 Prepare the forecast Step 6 Monitor the forecast “The forecast”
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Types of Forecasts Judgmental - uses subjective inputs Time series - uses historical data assuming the future will be like the past Associative models - uses explanatory variables to predict the future
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Ch03_FC1 - Copy - FORECASTING I see that you will get an A...

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