Module 4 Flashcards
A prediction, estimate, or determination of what will occur in the future based on a certain set of factors.
The value being forecast may be sales, interest rates, funds, gross national product (GNP), technological status, and others.
Forecast
Covers one day to one year and is used mainly for short-run control such as employment, purchasing, scheduling, sales, and production rates.
Short-term forecast
A period ranging from one season to one or two years and is used for production schedules, revenues, cash flow, and budget planning.
Immediate-term forecast
When a forecast covers from two to five years or more like market trends, technology, facilities expansion, and general policy.
Long-term forecast
A technique that is based on qualitative data such as the collective opinion of the sales force to forecast the future.
Qualitative Techniques
A statistical forecasting technique that is based solely on historical data accumulated over a period of time.
Time Series Analysis
A method that is defined as relationships among independent and dependent variables in a system of related equations.
Causal Methods
Factors of Forecasting
Trend
Cyclical Factors
Seasonal Factors
Random Factors
It is the general movement or direction in the data. (e.g. The amount of supply and population in a certain city.)
the result of long-term factors such as population increases or decreases, shifting demographic characteristics of the population, improving technology, and/or changes in consumer preferences.
Trend
Forecasting factors applicable in longer-term regular fluctuations which may take several years to complete. (e.g. Economic activity of Japan after World War II to the present.)
Cyclical Factors
Forecasting factors in which variations in a time series are associated with a particular period of time; say a quarter, or a month. (e.g. Sales of Christmas decorations during the months of November and December.)
Seasonal Factors
These are events or effects that cannot be predicted with certainty but can impact on the data. (e.g. The price of materials for house construction in a certain city after a major earthquake.)
Random Factors
