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Chapter 5
Chapter 5
Forecasting
Forecasting
Learning Objectives
Learning Objectives
Students will be able to:
1. Understand and know when to use
various families of forecasting models.
2. Compare moving averages, exponential
smoothing, and trend time-series
models.
3. Seasonally adjust data.
4. Understand Delphi and other
qualitative decision-making
approaches.
5. Compute a variety of error measures.
Chapter Outline
Chapter Outline
5.1 Introduction
5.2 Types of Forecasts
5.3 Scatter Diagrams and Time
Series
5.4 Measures of Forecast Accuracy
5.5 Time-Series Forecasting Models
5.6 Monitoring and Controlling
Forecasts
5.7 Using the Computer to Forecast
Introduction
Introduction
Eight steps to forecasting:
1. Determine the use of the forecast.
2. Select the items or quantities to be
forecasted.
3. Determine the time horizon of the
forecast.
4. Select the forecasting model or
models.
5. Gather the data needed to make the
forecast.
6. Validate the forecasting model.
7. Make the forecast.
8. Implement the results.
These steps provide a systematic way of initiating,
designing, and implementing a forecasting system.
Types of Forecasts
Types of Forecasts
Forecasting Techniques
No single method is superior
Qualitative Models: Time-Series Methods: Causal Methods:
attempt to include include historical data include a variety of
subjective factors over a time interval factors
Delphi
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