Q - responses to new product • medium term(3 months 2...

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Types of forecasting (qualitative, time series, causal) (pg. 333-334) Qualitative : subjective or judgmental and are based on estimates and opinions of experts; most useful when the product is new or there is little experience with selling in a new region. (For descriptions of the 4 types of qualitative forecasting see #2 below) Market research Panel consensus= putting a group of people together to share ideas openly Historical analogy= predicting the sales of one product to the past sales of a similar product (coffee makers and toasters) Delphi method--go out and get objective information from people who are knowledgeable in the field who remain anonymous to collect most correct info (pg. 310) Time series(Qualitative): chronologically ordered data relating to past demand can be used to predict future demand, can include trend, seasonal, or cyclical influences short term (< 3 months) for tactical decisions like replenishing inventory or scheduling employees; compensates for random variation/adjust for short term changes-consumers’
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Unformatted text preview: responses to new product • medium term (3 months -- 2 years) for planning strategy for meeting demand for next 6 months to 1 ½ years; captures seasonal effects • long term (> 2 years) for detecting general trends and identifying major turning points (pg. 314-315) Decomposition of a Time Series: separating times series data into components • easy to identify trends (plot and see direction of movement) & seasonal components (compare same period year to year) • hard to identify cycles (may be months or years long) • seasonal variations: additive (trend + seasonal) and multiplicative (trend x seasonal factor; amount of correction needed in a time series to adjust for the season of the year) Decompose time series into its components a. Find seasonal component b. Deseasonalize the demand c. Find trend component . Forecast future values of each component a. Project trend component into the future b. Multiply trend component by seasonal component...
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Q - responses to new product • medium term(3 months 2...

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