Economics

Question 1

Qualitative Forecasting Techniques

Qualitative forecasting techniques are for the most part more subjective than their quantitative partners. Qualitative techniques are handier in the former phases of the product life cycle, when few information exists for operation in quantitative systems. Qualitative strategies integrate the Delphi method, Sales Force Forecast (Opinions of Sales Force parts), Jury of Executive Opinions Nominal Group Technique (Ngt), Users Expectations (by means of surveys, overviews and different devices) and , market surveying.

Qualitative forecasting methods are:

1. Delphi Method: forecast is developed by a board of experts who secretly answer a series of questions; replies are fed back to panel members who then may change their original responses

Very time consuming and costly

New groupware constructs this process more feasible

3. Product Life-Cycle Analogy: predictions based on life-cycles of processes, items, or services

3. Market Research: test markets, panels, surveys questionnaires, etc.

4. Expert Judgment by organization, sales team.

The Advantages Disadvantages of Qualitative Forecasting

Managers predict to update and help their choices. A modest entrepreneur can utilize predictions to confirm if he would contract new representatives, while the chief executive of a substantial organization can utilize client's data about overviews to arrange advertising campaigns. Unlike quantitative forecasting, figures are not at the center of qualitative forecasting, which depends on experience, conclusions. and judgments.

Predictive Ability

The primary significance of qualitative forecasting is its capability to foresee changes in sales designs and clients conduct dependent upon the experience and judgment of senior executives and outside masters. Administration can utilize the qualitative inputs as a part of conjunction with quantitative estimates and financial information to measure deals trends. Quantitative forecasting uses past data to anticipate future predictions, while monetary information incorporate short- and enduring investment rates and unemployment levels. Case in point, if the economy is relied upon to decrease in the short term, a modest entrepreneur might depends on his own experience and that of his senior sales staff to estimate a minor decrease in saless one year from now.

Flexibility

Qualitative forecasting gives management the adaptability important to utilize non-numerical information sources, for example the instinct and judgment of encountered supervisors, deals experts and industry masters. This can improve the nature of an estimate in light of the fact that quantitative information cannot catch detail that years of experience can classify. For instance, if a little business is trying to open another store, the quantitative information might indicate solid verifiable sales drifts for the zone. Nonetheless, due creativity may demonstrate that as of late authorize zoning changes for another shopping center could have a huge affect on sales going advance, which might make the new area inadequate. Administration could then use its aggregate results to run ahead with the extension, change to the last sale.

Ambiguity

Qualitative forecasting is handy when there is vague or insufficient information. For instance, starting up innovation organization moving another programming provision will not have saved information for any type of quantitative examination. It can utilize results because of similar organizations and measures of business size to anticipate future sales, however it is the judgment ...