# Qualitative Time Series Forecasting Methods

TrustingSalamander
·
·

Start Quiz

Study Flashcards

## 28 Questions

### ______ is a sophisticated weighted moving average method that calculates the average of a time series by giving recent demand values more weight than earlier demand values. The formula for ______ is Ft+1 = Ft + α (Dt - Ft) where t+1 Ft+1 = forecast of the time series for period Dt = actual value of the time series in period t Ft = forecast of the time series for period t α = smoothing constant (0 < α < 1)

Exponential Smoothing

### ____ is a method in quantitative forecasting that calculates the average of a time series by giving recent demand values more weight than earlier demand values.

Exponential Smoothing

### The formula Ft+1 = Ft + α (Dt - Ft) is used in ____ method for time series forecasting.

Exponential Smoothing

0 < α < 1

### ____ is the measurement used to evaluate the accuracy of forecasts.

Measurement of Forecast Accuracy

### _________ forecasts compiled from estimates of future demand made periodically by members of a company’s sales force

Sales Force Estimates

forecast

datagathering

anonymity

statistical

identified

forecasts

end

markets

demand

supply

occurrence

### In linear regression models, the dependent variable is a function of only one ______

independent variable

graphed line

slope

variables

sales

stable

trial

average

Dt-2

average

average

## Study Notes

### Exponential Smoothing

• Exponential Smoothing is a sophisticated weighted moving average method that calculates the average of a time series by giving recent demand values more weight than earlier demand values.
• Formula: Ft+1 = Ft + α (Dt - Ft), where Ft+1 = forecast of the time series for period t+1, Ft = forecast of the time series for period t, Dt = actual value of the time series in period t, and α = smoothing constant (0 < α < 1).
• The smoothing constant α should be such that 0 < α < 1.

### Forecasting Methods

• Executive Opinion: opinions, experiences, and technical knowledge of one or more managers are summarized to arrive at a single forecast.
• Market Research: a systematic approach to determine consumer interest in a product or service by creating and testing hypotheses through surveys.
• Delphi Method: a process of gaining consensus from a group of experts while maintaining their anonymity.

### Forecasting

• Forecasting is the art and science of predicting future events or future value of a variable of interest.
• Virtually all management decisions are based on forecasting.
• A forecast is a statement of what may be expected to happen, based upon the present conditions and observations interpreted in the light of previous experiences.

### Time Series

• Time series is a pattern formed by repeated observations of demand for a product or service in their order of occurrence.
• The objective of time series analysis is to identify patterns and trends in the data to make informed forecasts.

### Linear Regression

• Linear regression is a causal method used when historical data are available and the relationship between the factor to be forecasted and other external or internal factors can be identified.
• Formula: y = a + bx, where a = y-intercept of the line, and b = slope of the line.
• The objective of linear regression analysis is to find values of a and b that minimize the sum of the squared deviations of the actual data points from the line.

### Moving Average

• The simple moving average is useful for forecasting demand that is stable or does not display pronounced demand behavior.
• Weighted Moving Average: each historical demand in the average can have its own weight, and the weights are determined through trial-and-error experimentation.

### Quantitative Forecasting Methods

• Compute a 3-month and 5-month moving average orders forecast for Serenity Rice Trading.
• The 3-month and 5-month moving average forecasts are used to determine the expected demand for the next period.

Explore qualitative or judgment methods used in time series forecasting, including Sales Force Estimates, Executive Opinion, Market Research, and the Delphi method. Learn how these approaches help in making future demand predictions.

## Make Your Own Quizzes and Flashcards

Convert your notes into interactive study material.

## More Quizzes Like This

15 questions
67 questions
10 questions
Use Quizgecko on...
Browser
Information:
Success:
Error: