Forecasting in Quantitative Analysis Essay example
I am highly honoured to give a presentation on forecasting. You are all welcome. Every organisation’s success depends on how well it is able to forecast. We will look at the meaning of forecast, the steps, qualitative and quantitative forecasting and finally the benefits.
The Meaning Of Forecasting
Forecasting is a process of predicting or estimating the future based on past and present data. Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions. Forecasting is the basis of premising. Forecasting …show more content…
6. Follow up action: The forecasting process can be continuously improved and refined on the basis of past experience. Areas of weaknesses can be improved for the future forecasting. There must be regular feedback on past forecasting.
Qualitative forecasting techniques generally employ the judgment of experts to generate forecasts. A key advantage of these procedures is that they can be applied in situations where historical data are simply not available. Moreover, even when historical data are available, significant changes in environmental conditions affecting the relevant time series may make the use of past data irrelevant and questionable in forecasting future values of the time series. For example, historical data on gasoline prices would likely be of questionable value in determining future gasoline prices if other factors (oil boycotts, gasoline rationing programs, scientific breakthroughs in alternative energy use, etc.) suddenly assumed increased importance. Qualitative forecasting methods offer a way to generate forecasts in such cases. Three important qualitative forecasting methods are: the Delphi technique, scenario writing, and the…