Forecasting Ppt01
Forecasting Ppt01
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“A statement about the future value
of a variable of interest
such as demand.”
FORECASTING
F
O
R The basis for budgeting, planning capacity, sales,
production and inventory, personnel, purchasing
E and more.
C It plays an important role in the planning process
A because they enable managers to anticipate the
future so they can plan accordingly.
S
T It is also an important component of yield manage
ment.
I
N
G
FORECASTING
affect decisions and activities throughout an organization
ACCOUNTING MARKETING
New product/process cost estimates, Pricing and promotion, e-business strategies,
01 profit projections, cash management. 04 global competition strategies
FINANCE OPERATIONS
Equipment/equipment replacement needs, Schedules, capacity planning, work
02 timing and amount of funding/borrowing 05 assignments and workloads
needs.
5. WRITING
7. COST EFFECTIVE
STEPS IN
FORECASTING
QUALITATIVE
Qualitative methods consist mainly of subjective inputs
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, which often defy precise numerical description.
TWO METHODS
OF
QUANTITATIVE FORECAS
Quantitative methods involve either the projection of hist
orical data or the development of associative models that 02 TING
attempt to utilize causal (explanatory) variables to make
a forecast.
TWO TECHNIQUES OF FORECASTING
QUANTITATIVE TECHNIQUES
QUALITATIVE TECHNIQUES
ASSOCIATIVE
JUDGMENTAL TIME-SERIES
MODELS
VARIETY OF
FORECASTING
TECHNIQUES
FORECAST BASED ON JUDGEMENT
SALESFORCE OPINIONS
EXECUTIVE OPINIONS
A B
D OTHER APPROACHES
C
CONSUMER SURVEYS
NAÏVE METHODS
“A forecast for any period that equals
the previous period’s actual
value.”
NAÏVE FORECAST
NAÏVE FORECAST
TECHNIQUES FOR
AVERAGING
Historical data typically contain a certain amount of
random variation, or white noise, that tends to
obscure systematic movements in the data.
THREE
One weakness of the naive method is that the forecast just traces the
actual data, with a lag of one period; it does not smooth at all. But by
expanding the amount of historical data a forecast is based on, this
difficulty can be overcome
It uses a number of the most recent actual data values in generating a forecast.
MOVING AVERAGE
MOVING AVERAGE
MOVING AVERAGE
MOVING AVERAGE
“More recent values in a series
are given more weight in
computing a forecast.”
EXPONENTIAL SMOOTHING
EXPONENTIAL SMOOTHING
EXPONENTIAL SMOOTHING
TECHNIQUES FOR TREND
SOLUTION
SOLUTION
TREND-ADJUSTED EXPONENTIAL SMOOTHING
TECHNIQUES FOR SEASONALITY
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TECHNIQUES FOR SEASONALITY
USING SEASONAL RELATIVES
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DESEASONALIZE DATA AND INCORPORATING SEASONALITY
EXAMPLE
EXAMPLE
COMPUTING SEASONAL RELATIVES
COMPUTING SEASONAL RELATIVES
COMPUTING SEASONAL RELATIVES
COMPUTING SEASONAL RELATIVES
USING THE SIMPLE AVERAGE METHOD
COMPUTING SEASONAL RELATIVES
USING THE SIMPLE AVERAGE METHOD
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COMPUTING SEASONAL RELATIVES
USING THE SIMPLE AVERAGE METHOD
TECHNIQUES FOR CYCLES
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TECHNIQUES FOR CYCLES
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TECHNIQUES FOR CYCLES
“Associative techniques rely on identification
of related variables that can be used to predict val
ues
of the variable of interest.
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SOLUTION
SOLUTION
SOLUTION
SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
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SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
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SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
SIMPLE LINEAR REGRESSION
SOLUTION
SIMPLE LINEAR REGRESSION
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ACCURACY AND CONTROL OF FORECASTS
ACCURACY AND CONTROL OF FORECASTS
ACCURACY AND CONTROL OF FORECASTS
𝑒1 𝐴1 𝐹1
ACCURACY AND CONTROL OF FORECASTS
SUMMARIZING FORECAST ACCURACY
SUMMARIZING FORECAST ACCURACY
SUMMARIZING FORECAST ACCURACY
SUMMARIZING FORECAST ACCURACY
MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
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MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
SOLUTION
MONITORING FORECAST ERROR
SOLUTION
SOLUTION
SOLUTION
MONITORING FORECAST ERROR
MONITORING FORECAST ERROR
CHOOSING FORECAST TECHNIQUE
CHOOSING FORECAST TECHNIQUE
CHOOSING FORECAST TECHNIQUE
CHOOSING FORECAST TECHNIQUE
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USING FORECAST INFORMATION
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USING FORECAST INFORMATION
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COMPUTER SOFTWARE IN FORECASTING
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OPERATIONS STRATEGY
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OPERATIONS STRATEGY
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OPERATIONS STRATEGY
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OPERATIONS STRATEGY
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OPERATIONS STRATEGY
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OPERATIONS STRATEGY
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