Forecasting , it's types, Time horizons and 7 basic steps.pptx

The ppt explains forecasting with its basic definition, purpose, and types. It sheds light on three forecasting time horizons and explains the seven basic steps of forecasting.

1. FORECASTING

2. FORECASTING is the art and science of predicting future events. Making good estimates is the main purpose of forecasting. FORECASTING may involve taking historical data (e.g. past sales) and projecting them into the future with a mathematical model. It may be a subjective or an intuitive prediction (e.g., “this is a great new product and will sell 20% more than the old one”). It may be based on demand-driven data, such as customer plans to purchase, and projecting them into the future. DEFINITION, PURPOSE & NATURE OF FORECASTING

3. SHORT-RANGE FORECAST : This forecast has a time span of up to 1 year but is generally less than 3 months. It is used for planning, purchasing, job scheduling, workforce levels, job assignments, and production levels. 2. MEDIUM-RANGE FORECAST : A medium-range, or intermediate, forecast generally spans from 3 months to 3 years. It is useful in sales planning, production planning and budgeting, cash budgeting, and analysis of various operating plans. 3. LONG-RANGE FORECAST: Generally 3 years or more in time span, long-range forecasts are used in planning for new products, capital expenditures, facility location or expansion, and research & development.

4. ECONOMIC FORECASTS : Addresses the business cycle by predicting inflation rates, money supplies, housing starts, and other planning indicators. 2. TECHNOLOGICAL FORECASTS: Are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment. 3. DEMAND FORECASTS: Are projections of demand for a company’s products or services. Demand-driven forecasts drive a company’s production, capacity, and scheduling systems and serve as inputs to financial, marketing, and personnel planning.

5. 7 STEPS IN FORECASTING ABC company takes into account the sales of specific products. SELECT THE ITEMS TO BE FORECASTED: Sales of the newly design item needs to be predicted. DETERMINE THE TIME HORIZON OF THE FORECAST: Select the proper time horizons for forecasting the sales of the items; e.g. monthly, quarterly, annually . SELECT THE FORECASTING MODEL(S): Select the proper statistical model. DETERMINE THE USE OF THE FORECAST:

6. GATHER THE DATA NEEDED TO MAKE THE FORECAST: Data collection with the help of different channels, say surveys. MAKE THE FORECAST: Do it. VALIDATE AND IMPLEMENT THE RESULTS: Review the results and set future projections . 7 STEPS IN FORECASTING THANKS

7. For complete video lecture on this ppt in Hindi/Urdu, Go on the below mentioned link https://www.youtube.com/watch?v=mblS9J-pyMg