Methods of Forecasting

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METHODS OF FORECASTING Internet Field Trip: Assignment 2 Math 540 Dionne C. Coleman 11/18/2013 Professor Basil I TABLE OF CONTENTS Introduction Types of Forecasting Methods Benefits & Applications of Forecasting References 2 © 2010 Wipro Ltd - Confidential Introduction • Forecast is a prediction of what will occur in the future • A variety of forecasting methods exist, and their applicability is dependent on time frame of the forecasting (Taylor, 2011) • Components • Methods • Applications The components Forecasting Application The methods 3 © 2010 Wipro Ltd - Confidential FORECASTING Why is Forecasting essential? • Forecasting gives the organization a way to anticipate performance. • Forecasting should be an organization-wide activity • Keeps corporations up to date with trends, internally and externally effect business growth at some period in time • Decision making tool 4 © 2010 Wipro Ltd - Confidential Forecasting Components Three Time Frames • Short-range forecasting—Immediate or daily business operations • Medium-range forecast—typically ranges from 1-2 months to 1 year • Long-range forecast—consist of a period longer than 1 year 5 © 2010 Wipro Ltd - Confidential FORECASTING METHODS Types of forecasting methods: *Time Series-categorizes statistical historical data *Regression or Casual—develops a mathematical relationship *Qualitative methods-use of management judgment “the jury of executive opinion” “Time series forecasting has been used in many real cases as a decision-making aid” Marroquíina, M., Cervantes, M., Flores, J., & Cabrera-Ríos, M. (2009) (p.2). 6 © 2010 Wipro Ltd - Confidential Forecasting Methods Time Series Methods • Moving average-consist of random up-and-down movement in demand •Weighted Moving Average-can be adjusted to track current shifts in data or

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