Statistics work best over a long tenure where

This preview shows page 10 - 13 out of 13 pages.

Statistics work best over a long tenure, where recurring differences normalize, and business conditions remain unchanged. Market environment conditions and industry specific trends are not projected statistically. Judgmental forecasting depends on human knowledge to foresee future commercial needs. This could be contributions from sales managers identifying business development or a production manager predicting resource needs. Reliant on people’s input, this type of forecasting can either be very precise or largely off-base. Nevertheless, human perception fits the flexibility required for short-range analysis, accompanied by the intuitive factors that industries in rapidly changing environments necessitate. Practically speaking, forecasting needs combines fundamentals of both strategies. When basing data on preceding periods and apply approximations for future performance, your analysis is both statistically and judgmentally. A cyclical business might suffer in a specific period because of bad climatic conditions, and the manager will align resources, accounting for the arrival of normalized climate conditions that are favourable to his business. Similarly, applying the views of the sales team to statistical data might account for variations in demand.
Image of page 10

Subscribe to view the full document.

11 2.5.3 a) Calculate the three-period moving-average forecasts for August and September. (2) F4= 42+40+41/3= 41.00 F5= 40+41+39/3= 40.00 b) Calculate the single exponential smoothing forecasts (wit h α of 0.4) for August and September. Assume that the forecast for the July period is 40. (2) F4 = 0.4(41) + 0.6(40) = 40.40 F5 = 0.4(39) + 0.6(40.40) = 39.84
Image of page 11
12
Image of page 12

Subscribe to view the full document.

Image of page 13

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern