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3.1 Critically analyse four types of forecasting methods
3.1 Critically analyse four types of forecasting methods
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Forecasting methods are essential for businesses to make informed decisions and plan for the future There are several types of forecasting methods used by organizations each with its own strengths and weaknesses Here we will critically analyze four types of forecasting methods 1 Qualitative Forecasting Methods Qualitative forecasting methods rely on expert judgment market research and subjective opinions to predict future trends Examples of qualitative forecasting methods include Delphi technique market research and expert opinion These methods are valuable when historical data is limited or unreliable or when making predictions for new products or markets However qualitative methods can be biased lack objectivity and may not always be accurate due to human error or inconsistency 2 Time Series Analysis Time series analysis involves analyzing historical data to identify patterns trends and seasonality that can be used to forecast future values This method includes techniques such as moving averages exponential smoothing and trend analysis Time series analysis is useful for forecasting shortterm trends and making predictions based on past performance However this method may not account for sudden changes or external factors that could impact future outcomes 3 Quantitative Forecasting Methods Quantitative forecasting methods involve using mathematical models and statistical techniques to predict future outcomes based on historical data Examples of quantitative methods include regression analysis ARIMA models and neural networks These methods provide a systematic and objective approach to forecasting allowing for more accurate predictions and trend analysis However quantitative methods require accurate and reliable historical data and may not always capture complex relationships or unforeseen events 4 Causal Forecasting Methods Causal forecasting methods involve identifying and analyzing the relationship between variables to predict future outcomes These methods use ...
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Operations Management Creating Value Along the Supply Chain
Authors: Roberta S. Russell, Bernard W. Taylor
7th Edition
9781118139523, 0470525908, 1118139526, 978-0470525906
