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Description of Forecasting Methods

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Prepare a 1,050-1,400-word paper in which you compare and contrast forecasting methods (e.g., seasonal, Delphi, technological, time series). Explain how your organization or an organization with which you are familiar uses one or more of these methods to forecast demand under conditions of uncertainty.

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Solution Summary

This will discuss the forecasting methods such as Delphi, technological, time series

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Forecasting is an essential tool in any decision making process. There are various techniques of forecasting:

Qualitative techniques involve primarily judgment, and quantitative, involving primarily historical data and mathematical models.
Qualitative techniques rely on judgment, intuition, and subjective evaluation. Among the major techniques within this category are market research (surveys), Delphi (panel consensus), historical analogy, and management estimation (guess).

Evaluation of Qualitative techniques:
These techniques are based on good theory and can yield valuable information for marketing decisions

The Delphi Technique is a form of evaluation. Most often this technique is used for forecasting future events or products. It is commonly used in software development. The basic strategy behind Delphi evaluations is to get estimates from experts and then use those estimates to get more estimates from experts until enough information is available to conduct the evaluation. Opinions expressed as part of a Delphi Technique session are usually exempt from retaliation from the organization, company or group conducting the evaluation, as a way to encourage "out of the box" thinking. The Delphi, or panel consensus, method may be useful in
Technological forecasting, that is, in predicting the general state of the market, economy, or technological advances five or more years from now, based on expert opinion,
When attempting to forecast demands for a new item these techniques are more useful as there is no previous history
It may be more appropriate to relate the products only qualitatively in order to get an impression of demand patterns or aggregate demand if the relationship is not direct between them.
When substantial data are lacking, subjective management judgment may be the better alternative
Limitations
They are not intended directly to support inventory decisions. Rather, they are intended to support product development and promotion strategies.
Data gathered by these methods should be considered in some aggregate inventory or capacity planning decisions, but should not be the sole data source for such decisions.
The Delphi technique is not a suitable technique for short-range forecasting, certainly not for individual products.
If the related product is very similar, quantitative techniques may be used.

Different methods of quantitative ...

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