qmst notes10 - Forecasting Methods Nave Forecasting-The...

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Forecasting Methods - Naïve Forecasting -The forecast for the future time period is the actual value for a previous time period. Can use the most recent data. Sales next month will equal last months' sales. Or can use a time period with a similar characteristic. Sales this holiday season will be similar to last holiday season's sales. Averaging Models -Using an average of observations over previous time periods as the forecast value. Simple average : simply averaging earlier observations to forecast future values. Moving average : an average that's recomputed for each new time period. Ex: customer satisfaction over a 12 month period. Every month average that month's score along with the previous 11 months' scores to forecast the subsequent month's score. Weighted moving average : Placing more importance on more recent observations i.e., last month's score. Trend analysis -Using linear regression analysis. Formula : ŷ = β o + β 1 (x 1 ) + β 2 (x 1 2 ) . Index Numbers or 'Index Scores' - Similar to standard scores (e.g., z-scores) in that they allow: Us to compare different measures. A simple-to-understand score for reporting purposes. Simple Index Number Formula
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This note was uploaded on 01/26/2012 for the course QMST 2333 taught by Professor Mendez during the Spring '08 term at Texas State.

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qmst notes10 - Forecasting Methods Nave Forecasting-The...

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