OM 374 Chapter 9 Vocab Causal Forecasting Methods Causal forecasting techniques employ mathematical relationships amongst two or more variables They take into account economic and business variables that may contribute to the forecast of specific business phenomena regression analysis econometric model intention to buy and anticipation surveys input output model economic I O model diffusion index leading indicators lifecycle analysis Delphi Method The Delphi method generates subjective information provided by experts who answer a series of questions on several questionnaires over an extended period of time Results of one questionnaire are reflected on consecutive questionnaires so that all information that is available is made available to all experts answering the next questionnaire Exponential Smoothing In the basic model of exponential smoothing the forecast is made by using the previous forecast plus some portion of the previously made forecasting error The basic exponential smoothing model however can be adjusted for trend and seasonal effect Forecasting In general terms forecasting is a technique whereby past experience is transformed into general predictions of things to come in order to 1 predict sales volume of individual end products 2 predict gross sales 3 determine facility capacity requirements 4 define the labor force capacity over time 5 predict gross national product 6 forecast changes in the national labor productivity etc Market Survey Market surveys are systematic formal or informal and conscious methods whereby certain hypotheses about the actual market can be defined and tested Surveys can be mail surveys personal interviews or telephone surveys Mechanical Projection Techniques Some mechanical projection techniques are moving averages exponential smoothing Box Jenkins trend projections regression analysis econometrics leading indicators lifecycle analysis etc Moving Average When calculating moving averages only data from more recent time periods are used The moving average methods tend to lag a trend raise the valleys and depress the peaks of cyclic patterns Political and Sociological Forecasting Political and sociological forecasting measure monitor and consequently predict national political and social issues that may have a significant impact on business Qualitative or Predictive Methods Qualitative forecasting methods employ human judgments and rating schemes to convert intangible data into quantitative estimates Delphi method market research panel consensus visionary forecasting and historical analogy Regression Analysis Regression analysis enables us to make value estimates for variables from information of values coming from one or more other variables Leading independent variables are used to predict their dependent variable using a variety of mathematical relationships linear and non linear models Technological Forecasting Technological forecasting aims at predicting future technological capabilities attributes and parameters in an attempt to bring about tomorrow s evolving technologies mathematical modeling computer modeling probabilistic systems dynamics cross impact models trend impact analysis growth curves scoring models patent analysis bibliometrics and scenario analysis Time Series Analysis and Projection Methods Time series methods are statistical techniques that use historical data to predict the future moving average exponential smoothing Box Jenkins X 11 of Census Bureau and trend projections