Forecasting Techniques in Business

Qualitative techniques include soft information like human factors and personal opinions, while quantitative techniques rely on historical data or causal variables.

Trend is a long-term upward or downward movement in data, often influenced by population shifts or changing income.

The assumption is that future values of a time-series can be estimated from past values of the time-series.

<p>Judgmental forecasts use subjective inputs like consumer opinions or expert insights to make predictions.</p> Signup and view all the answers

<p>A naïve forecast uses a single previous value of a time series as the basis for a forecast, making the forecast equal to the previous time period's value.</p> Signup and view all the answers

<p>Moving Average Technique averages a number of the most recent actual values equally, while Weighted Moving Average gives more weight to the most recent values in the time series.</p> Signup and view all the answers

<p>Exponential Smoothing is a weighted averaging method that includes the previous forecast plus a percentage of the forecast error, while Moving Average Technique averages a number of the most recent values equally.</p> Signup and view all the answers

<p>Some companies use Focus Forecasting to apply several forecasting methods to historical data and select the method with the highest accuracy for making future forecasts.</p> Signup and view all the answers

<p>Diffusion Models are used when historical data for new products are not available, relying on rates of product adoption, market potential, mass media attention, and word-of-mouth to make predictions.</p> Signup and view all the answers

<p>Additive Seasonality involves adding or subtracting a quantity from the time-series average, while Multiplicative Seasonality involves expressing seasonality as a percentage of the average or trend amount to multiply the series value.</p> Signup and view all the answers