FORECAST

Forecast - statement about the future

FORECAST USES

Plan the system - long range plans

Plan the use of the system - short and medium range plans

EXAMPLES OF USES IN FORECAST IN BUSINESS ORGANIZATION

Accounting- new products / process cost

Finance - Equipment

Marketing- pricing and promotion

MIs - New revised information systems

Human resource - hiring activities

Operations - schedules I capacity planning

Product and service design - revision of current features

2 APPROACHES OF FORECASTING

Qualitative - an approach that uses subjective inputs

Quantitative- projection of numerical data

TYPES OF FORECAST

Judgemental - a type of forecast that uses subjective inputs

Time series - uses historical data

Associative models - uses explanatory variables

JUDGEMENTAL FORECAST (QUALITATIVE)

C onsumer surveys

D elphi method

E executive opinions

S ales force

TIME SERIES FORECASTS (QUANTITATIVE)

Trend - long term upward or downward movement in data

Seasonality - short term regular variations in data

Irregular variations - causes by unusual circumstances

Random variations- causes by chance

CYCLE- wave like variations

TECHNIQUES OF AVERAGING

NAIVE

SIMPLE MOVING AVERAGE

WEIGHTED MOVING AVERAGE

EXPONENTIAL SMOOTHING