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Types of Forecasting and Statistical Quality Control

Please assist with answering the following questions:

1) Explain the differences between qualitative and judgmental, statistical time-series, and explanatory/causal forecasting models.
2) Describe some common forecasting approaches for judgmental forecasting.
3) What is the difference between variables and attributes?
4) Describe the meaning of the term in control.
5) Describe the steps involved in applying statistical process control.

Solution Preview

1) Explain the differences between qualitative and judgmental, statistical time-series, and explanatory/causal forecasting models.

Qualitative forecasting - These models attempt to use actual non-numerical data to determine actual market trends regarding a certain position or function in the market. They are mainly used during the beginning stages of a product's lifecycle in order to predict the future using judgment or intuition from individuals who are experts in the industry or individuals who have hands-on experience in the industry.

Judgmental forecasting - These are one of the most commonly used forecasting models which rely more on judgment instead of data by using assessments based on past experience or past trends. Judgmental forecasting models can be somewhat subjective because they are based more on human intuition rather than facts.

Statistical time-series forecasting - These models focus on projections in trends, cyclicality and seasonality based on historical data compiled over the course of many years or instances. Time-series forecasting seems to ...

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