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Unformatted text preview: Fundamental Forecasting Approaches: o Judgmental Human knowledge; based on opinion Potential bias & reaction to immediate events or experience Salesperson surveys (expert opinion) Delphi approach (group approach) o Relational Cause & effect modeling Purchasing manager surveys o Experimental Generally used for brand new product (no past data) Test markets o Time Series Use past data to build a model & observe what’s happening over periods of time More reliable forecast Two types of info: • Pattern forecast • Noise ignore (random variation in data that cannot be explained) Can categorize into seasonality, trend, & noise Seasonality over several years = cycle D(t) = (L+Tt)[S(t)]+r *r = random/error; T = trend...
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- Spring '12
- Forecasting, Time series analysis, Trend estimation