Qualitative Models Flashcards
What are the two main classifications of forecasting methods?
Qualitative and Quantitative
What type of forecasts are classified as Judgmental?
Qualitative forecasts
What are the types of quantitative forecasting methods?
Time Series and Causal
When should Judgmental forecasts be used?
When data as a historical series is not available or relevant, for unusual products, or when the forecast horizon is longer than safe extrapolation
What is a pro of using qualitative forecasts?
Little mathematical skill required
What is a con of qualitative forecasts?
Almost always biased
List some types of qualitative forecasting methods.
- Sales force composite
- Consumer survey
- Jury of executive opinion
- Delphi method
What is the Sales Force Composite method?
Sales people provide a range of forecasts for a given SKU, which are aggregated by sales managers
What is a pro of the Sales Force Composite method?
Information collected from sales force with daily customer contact
What is a con of the Sales Force Composite method?
Can be biased towards over-forecasting or under-forecasting
What methods are typically used for consumer surveys?
- Telephone contacts
- Personal interviews
- Questionnaires
- Focus groups
What assumptions does the Consumer Surveys method make?
Consumers plan their purchases and follow through with their plans
What is the Jury of Executive Opinion method?
Combination of opinions from managers and executives to forecast business insights
What is a pro of the Jury of Executive Opinion method?
Forecasting is done quickly and easily
What is a con of the Jury of Executive Opinion method?
Groupthink can stifle dissent and critical thought
What does the Delphi Method involve?
A structured process using rounds of questioning to gather expert opinions
True or False: The Delphi Method fosters strong leadership that encourages conformity.
True
What is the main goal of using consumer surveys?
To test hypotheses regarding consumer behavior
