Ch 8 - Chapter 8 Forecasting Xun Li 2 Learning Objectives 1...

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Unformatted text preview: Chapter 8. Forecasting Xun Li 2 Learning Objectives 1) Introduction 2) Time-Series Methods Simple & Weighted Moving Average* Exponential Smoothing Method* Forecasting Trends** 1) Cross-sectional Methods** 2) Evaluation of Models** LO1: Introduction Something about forecasting…… Business decisions are based on the forecast of the future Many types of forecasting models Each differ in complexity and amount of data Forecasts are rarely perfect Forecasts are more accurate for grouped data than for individual items Forecast are more accurate for shorter than longer time periods 3 LO1: Introduction Forecasting Steps Decide what needs to be forecast Level of detail, units of analysis & time horizon required Evaluate and analyze appropriate data Identify needed data & whether it’s available Select and test the forecasting model Cost, ease of use & accuracy Generate the forecast Monitor forecast accuracy over time 4 LO1: Introduction Types of Forecasting Methods Qualitative methods: Forecasts generated subjectively by the forecaster Quantitative methods: Forecasts generated through mathematical modeling 5 LO1: Introduction Qualitative (judgmental) methods 6 Type Characteristics Strengths Weaknesses Executive opinion A group of managers meet & come up with a forecast Good for strategic or new-product forecasting One person's opinion can dominate the forecast Market research Uses surveys & interviews to identify customer preferences Good determinant of customer preferences It can be difficult to develop a good questionnaire Delphi method Seeks to develop a consensus among a group of experts Excellent for forecasting long-term product demand, technological Time consuming to develop LO1: Introduction Qualitative methods-Delphi Method 1. Choose the experts to participate. There should be a variety of knowledgeable people in different areas. 2. Through a questionnaire (or E-mail), obtain forecasts (and any premises or qualifications for the forecasts) from all participants. 3. Summarize the results and redistribute them to the participants along with appropriate new questions. 4. Summarize again, refining forecasts and conditions, and again develop new questions. 5. Repeat Step 4 if necessary. Distribute the final results to all participants. 7 LO1: Introduction Anytime a new product is introduced, or a menu changes, the Director of Purchasing and Supply Chain must provide sales projections for each store as to how much product is going to be needed and sold. The menus must be created and training is provided on the new product. To help forecast, T&K use several internally generated reports,...
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This note was uploaded on 10/17/2011 for the course MNGT 368 taught by Professor Curthurds during the Spring '08 term at Nicholls State.

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Ch 8 - Chapter 8 Forecasting Xun Li 2 Learning Objectives 1...

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