RMG 301 Lecture Notes - Lecture 3: Time Series, Demand Forecasting, Production Planning

• School: Ryerson University
• Department: Retail Management
• Course: RMG 301
• Professor: Norman Shaw

Document Summary

Identify the major factors to consider when choosing a forecasting technique. Quantitative methods use a time series model to extend the historical pattern of data into the future or the development of associative models that attempt to use explanatory variables to make a forecast. Judgmental techniques includes soft information (i. e. human factors, personal opinions, hunches in the forecasting process; factors are often omitted or downplayed when quantitative techniques are used. Time series models identify specific patterns in the data and project/extrapolate those patterns into the future without trying to identify causes of patterns. Associative models use equations that consist of one or more explanatory variables that can be used to predict future demand for the variable of interest. Executive opinions: a small group of upper-level managers (i. e. vps of marketing, operations and finance) may meet and collectively develop a forecast which is used as a part of long-term strategic planning and new product development.