How Do You Understand Business Forecast Methodology?
Forecasting is vital in businesses because it can be applied to different fields. The most famous use of this technique is in forecasting demand for a certain product. The data resulting from here will be used for inventory control, production planning and ordering. Here’s how to use two types of forecasting: the qualitative method and the quantitative method. Qualitative Forecast Methodology – This is used when there is no data available. • Ask the experts – Judgment of an experienced person based on his knowledge and facts can be considered a valid forecast. An example can be a marketing expert who can forecast a customer’s reaction for a new product to be launched. • Prediction markets – (This includes betting markets, futures and information market.) The forecast is a result of people’s prediction with the risk of losing money if his prediction or bet loses. Examples can be the futures market for commodities such as sugar and oil. • Delphi technique (group consensus) – This is used
