G.O Module 2

• • Economic forecasts: It addresses the business cycle by predicting inflation rates, money suppliers, housing starts, and other planning indicators.
• • Technological forecasts: These are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipments.
• • Demand forecasts: These are projections of demand for a company's products or service. These are forecasts, also called sales forecasts, drive a company's production, capacity, and scheduling systems and serve as inputs to financial, marketing, and personnel planning.
• Steps in the Forecasting Process

  Step 6 Monitor the forecast

  Step 5 Prepare the forecast

  Step 4 Gather and analyze data

  Step 3 Select a forecasting technique

  Step 2 Establish a time horizon

  Step 1 Determine purpose of forecast
• Types of Forecasts

  •Judgmental - Subjective analysis of subjective inputs

  •Associative models – Analyzes historical data to reveal relationships between (easily or in advance) observable quantities and forecast quantities. Uses this relationship to make predictions.

  •Time series – Objective analysis historical data assuming the future will be like the past
• Types of Variations in Time Series Data

  •Trend - long-term movement in data

  •Seasonality - short-term regular variations in data

  •Cycles – wavelike variations of long-term

  •Irregular variations - caused by unusual circumstances

  •Random variations - caused by chance
• Forecasts affect decisions and activities throughout an organization

  • Accounting, finance
  • Human resources
  • Marketing
  • Management Information System
  • Operations
  • Product / service design