Forecasting

Question 1

What are the 4 components of a time series analysis?

Answer 1

1. Trend
2. Cyclical variation
3. Seasonal variation
4. Random fluctuations

Question 2

What is quantitive data?

Answer 2

Measured by the quantity of something

Question 3

What is qualitive data?

Answer 3

Measured by the quality of something

Question 4

What is the delphi technique?

Answer 4

Relies on information from experts

Question 5

When is the delphi technique appropriate to use?

Answer 5

Little data is available
Market is subject to wide fluctuations
Market experiences significant change

Question 6

What type of business is time series analysis useful for?

Answer 6

One which faces cyclical or seasonal change

Question 7

How do you calculate a 3 year total?

Answer 7

Previous year+ current year+ next year

Question 8

How do you calculate a 3 period moving average?

Answer 8

Prev yr+ current yr+ next yr / 3

Question 9

How do you calculate cyclical variation?

Answer 9

actual sales - moving average sales

Question 10

Advantages of forecasting

Answer 10

Most recent information is more reliable

Allows the business to estimate further revenue

Question 11

Disadvantages of forecasting

Answer 11

Only as reliable as the data used
Assumptions are risky
Forecast does not take into account any change of businesses