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3...forecasting methods
 

3...forecasting methods

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    3...forecasting methods 3...forecasting methods Presentation Transcript

    • Presented by Nazrin Jamal3rd Sem IF CUSAT
    •  Method or technique for estimating many future aspects of a business or other operation.  It is used in the practice of customer demand planning in every day business forecasting for manufacturing companies.
    • There are three types of forecasting 1.Qualitative or Judgmental methods 2.Extrapolative or Time series methods 3.Causal or Explanatory methods
    • Rely on experts or managers opinion in making prediction for the future.Useful for medium to long range forecasting tasks.Provide a basis for some important decisions.
    • Three important Qualitative methods are :-Delphi Technique - Develop forecast through group consensus.Market Surveys – Involves the use of questionnaires, consumer panels & tests of new products & services.Scenario Writing - process of analyzing possible future events by considering alternative possible outcomes.
    • Use past history of demand.Comprised of four separate components: trend component, cyclical component, seasonal component, and irregular component.The objective of this method is to identify the pattern in historic data & extrapolate this for future.
    • TYPES OF EXTRAPOLATIVE METHODSMoving Average Method - average of demands occurring in several of the most recent periods.Weighted Moving Average - allows for varying weighting of old demands.Exponential Smoothing – exponentially decreases the weighting of old demands.
    • A statistical forecasting model based on historicaldemand data as well as on variables believed toinfluence demand.
    • There are two types of Causal forecasting methodsRegression analysis - a functional relationship is established between variables from the historical data and then used to forecast dependent variable values.Econometric method – an extension of regression analysis and include a system of simultaneous regression equations.
    • THANK YOU