Qualitative Forecasting pdf

1 Ch 4 Qualitative Forecasting Using expert opinion and collective experience to unlock the secrets of the future. 2 The keys to employing qualitative forecasting are: ♦ Data as an historical series is not available,or is not relevant to future needs. ♦ An unusual product or a unique project is being contemplated. 3 Keys:- ♦ There are numerous variables which will affect the project. 4 Keys: Sales by Year, With Automatic Twenty Year Prediction 0 2000 4000 6000 8000 10000 1980 1990 2000 2010 2020 2030 Year Sales ♦ The project’s life is longer than the safe extrapolation of a time series. 5 Keys: ♦ Experts are available, and should debate the issues. 6 Qualitative Forecasting: Data From Expert Opinion By Survey- ♦ Data can be gathered by phone or in writing. ♦ Data comes in three categories: 1. Highly valuable 2. Absolutely essential 3. Supporting material. ♦ The survey group is known as the ‘reference population’. 7 Qualitative Forecasting: Data From Expert Opinion ♦ Jury of executive opinion: senior managers draw upon their collective wisdom to map out future events. These discussions are carried out in open meeting, and may be subject to the drawbacks of group think and personality dominance. Using groups- 8 Qualitative Forecasting: Data From Expert Opinion ♦ The Delphi Method: drawing upon the group’s expertise by getting individual submissions, without the drawback of face to face meetings. Using groups- The Delphi Method is named after a famous Oracle who prophesied in the ancient Greek city of Delphi. An Oracle (wise person) interceded between men and gods. 9 Qualitative Forecasting: Data From Expert Opinion Using groups - ♦ The Nominal Group Technique is a face to face Delphi method, allowing group discussion. ♦ The Devils Advocate method poses sub- groups to question the group’s findings. ♦ The Dialectical Inquiry method poses sub-groups to challenge the group’s findings with alternative scenarios. 10 Qualitative Forecasting: Using Expert Opinion 1. Output from the group techniques is sorted into scenarios. 2. These scenarios are further reviewed by the group. 3. A final ‘consensus of opinion’ forecast is accepted by the group. [...].. .Qualitative Forecasting: Summary Qualitative forecasting is used when historical data is not available, or when the planning horizon is very long ♦ Qualitative forecasting uses expert opinion, collected in a variety of ways ♦Collected expert wisdom has to be carefully managed ♦Research . 4 Qualitative Forecasting Using expert opinion and collective experience to unlock the secrets of the future. 2 The keys to employing qualitative forecasting. of opinion’ forecast is accepted by the group. 11 Qualitative Forecasting: Summary ♦ Qualitative forecasting is used when historical data is not available,