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Observations of any variable recorded over a sequential period of time are considered time-series. Forecasting models, used...

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Statistics

Observations of any variable recorded over a sequential periodof time are considered time-series. Forecasting models,used to estimate values for some future period, are generallyclassified as either qualitative orquantitative.

Use the internet to research the differences between aqualitative forecasting model and a quantitativeforecasting model.

Assume you are an executive of a large transportation company,and your firm's profit is highly sensitive to fuel cost. The priceof gasoline and diesel changes daily, however, your customersexpect to be quoted a price for delivery services days, weeks, andsometimes, MONTHS in advance. Therefore, your firm relies heavilyon forecasting the price of fuel. Which method of forecasting mightyou use, qualitative or quantitative? And finally, what are thelimitations to business forecasting.

Answer & Explanation Solved by verified expert
3.9 Ratings (720 Votes)
Observations of any variable recorded over time in sequentialorder are considered a time series The measurements may be takenevery hour day week month or year or at any other regularinterval The time interval over which data are collected is calledperiodicity There are two common approaches to forecasting1 Qualitative Forecasting method Whenhistorical data are unavailable or not relevant to futureForecasts generated subjectively by the forecaster For example amanager may use qualitative forecasts when heshe attempts toproject sales for a brandnew product Although qualitativeforecasting method is attractive in certain scenarios its oftencriticized as its prone to optimism and overconfidence2 Quantitative Forecasting method Whenhistorical data on variables of interest are available Methods arebased on an analysis of historical data concerning the timeseriesof the specific variable of interest Forecasts are generatedthrough mathematical    See Answer
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