Forecasting Techniques

Forecasting Techniques - Forecasting Techniques Premises...

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Forecasting Techniques Premises are environment outlook of the company; critical premises are factors that affect the company’s success The three primary approaches for forecasting are: Experience, Probability, and Correlation (correlation in the past between one factor and another factor, such as increased advertising leading to increased sales) Forecasting Methods Time Series Method -Uses only historical values in an attempt to predict the future - looks at patterns of the desired variable over time. These patterns from the past are then used to forecast a future result. This Patterns could be: -Secular Trend: is the long-term change in spite of short-term ups and downs -Cyclical Fluctuation: are variations in the level of activity tied to the business cycle, ex: activity in the overall economy -Seasonal Variation: are common in many businesses, most obviously retail, which experiences a large spike in activity around the Winter holidays. -Irregular or random variable:
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This note was uploaded on 08/16/2011 for the course MGMT 301 taught by Professor Hisham during the Spring '11 term at McMaster University.

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Forecasting Techniques - Forecasting Techniques Premises...

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