Forecasting Elements of good forecast Accurate Timely Reliable Expressed in meaningful unit In writing Technique should be simple to understand and use Steps in forecasting process Determine the purpose of the forecast Establish a time horizon Select a forecasting technique Gather and analyse relevant data Prepare the forecast Monitor the forecast

Forecasting Approaches to Forecasting Based on Judgement and Opinion: Executive opinion Sales-force opinion Consumer surveys Delphi method 2. Based on Time Series Data: Trend Seasonality

Forecasting Averaging Techniques Simple moving average Weighted moving average

Forecasting Exponential Smoothing Simple Linear Regression For smoother demand,  is less, the forecasting trend will be smoother For fluctuating demand,  is more, the trend will be less smooth Simple Linear Regression

Forecasting Accuracy of Forecasts Two commonly used measures: Mean absolute deviation (MAD) Mean squared error (MSE)