forecasting Flashcards
(24 cards)
used to predict profits, revenues, costs, productivity changes, prices and availability of energy and raw materials, interest rate, movements of economic indications and prices of stocks and bonds
business forecasting
the art and science if predicting future events
forecasting
based on expert opinions and subjective judgments to make forecast
qualitative forecasting approach
based on historical data and mathematical models to make forecast
quantitative forecasting approach
relies on analysis of subjective inputs obtained in various sources such as consumer service the sales staff manager and executive panel of experts
judgemental forecast
often used as long range planning and new product development
executive opinion
it can tap information that might not be available elsewhere
consumer surveys
it is a good source of information because of its direct contrast with customers
salesforce composite
it has virtually no cost it is quick and easy to prepare because data analysis is non-existent and is easy to understand
naive forecast or forecast based on time series data
uses the average of a specific number of recent data points to forecast the next periods value
simple moving average
used to place more emphasis on recent values when there is attend or pattern
weighted moving average
it is used when there is no trend in demand for goods or services sales are forecasted for the next period
exponential smoothing
it utilizes a line of best fit to historical series to predict future values
trend line forcast
simplest and most widely used poem of regression involves a linear relationship between two variables
simple linear regression
it is concerned with selecting an option or alternative course of action given prior knowledge of its outcome for various future scenarios
decision analysis
in this approach the decision maker has no information concerning the relative likelihood of each of the states of nature
decision making without probabilities or decision making under risk
optimistic criterion
maximax strategy
conservative criterion
maximin strategy
compromise minimax regret strategy
minimax regret strategy
in this approach the decision maker has information concerning the relative likelihood of each of the states of nature
decision making under uncertainty or decision making with probabilities
the decision maker has information concerning the relative likelihood of each states of nature. the criterion used in decision making with probabilities is to select that decision so as to maximize the expected value of outcome
sensitivity analysis
it means figuring out likelihood or chance of each possible outcome that can happen after making a decision. you use this in a decision tree
calculating branch probabilities
it is a systematic quantitative and visual approach to addressing and evaluating the important choices that businesses sometimes encounter
decision analysis
a measure of how much a person values outcome
utility
