Das_Chapter 3_Forecasting_RevisedOCt 16th 2010

Das_Chapter 3_Forecasting_RevisedOCt 16th 2010 - Operations...

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‘Operations Management – A First Course’ @Ajay Das, Ph.D. Please do not reproduce, share, cite, post, or use in any way without author and publisher permission. 7y5jnhBusiness Forecasting (DRAFT) (SUSAN – will make further cuts after reading the final reviews) Chapter 3 Road Map: 3.1 What is business forecasting? Foretelling, estimating, and forecasting 3.2 Why is forecasting important? For businesses For you 3.3 How to make forecasting decisions? The forecasting process Forecasting approaches Qualitative forecasting: Judgment and counting methods Forecasting with data: Moving average and exponential smoothing Measuring forecasting accuracy Forecasting with data: Time series decomposition, trend, and seasonality Forecasting with data: Causal models Guidelines: What to use and when Measuring forecasting accuracy of forecasters Behavioral considerations in forecasting 3.4 Was it the right forecast? What could go wrong? Forecasting the tails and ‘black swans’ Indicators of forecasting performance 3.5 Current trends in forecasting Collaborative Planning, Forecasting and Replenishment Crowd forecasting Sensing technologies Data mining & AI Cloud computing 3.6 Conclusion What have we learned? 1 Chapter take-aways: The uses of forecasting Qualitative approaches to forecasting: Judgment and Counting Forecasting with data: Time series and causal approaches Applying the right mix of methods Pitfalls in forecasting Crowd forecasting, Data mining
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‘Operations Management – A First Course’ @Ajay Das, Ph.D. Please do not reproduce, share, cite, post, or use in any way without author and publisher permission. End of chapter discussion questions End of chapter problems and cases Customer: “Why should I choose you? Business: “Because we promise to anticipate your needs” 3.1 What is Business Forecastin g? Let us begin by stating what business forecasting is not. Business forecasting is not fortune telling. Fortune tellers believe they have the gift to ‘see’ the future; while forecasting uses data and experience to make reasoned anticipations of the future. Forecasting is not estimation. Estimation is most often conducted for things that exist, without probabilities. Forecasting looks into the state of the future. Preparing a project estimate is different from forecasting the chances of being awarded that project.We forecast, not estimate, snow tomorrow; however, we may estimate a certain number of inches after it begins to actually fall. How should we define business forecasting then? Business forecasting is the systematic application of human experience, human responses, human judgment, and historical data to develop a tangible, probabilistic statement about future events and trends. The statement could be specific to the future value of a particular variable(s) of business interest.
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Das_Chapter 3_Forecasting_RevisedOCt 16th 2010 - Operations...

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