Question:
This Discussion is based on the article, "Manager's Guide to Forecasting" by David Georgoff and Robert Murdick from Harvard Business Review. Make sure to acquire this article before starting the Discussion.
In this course, you will touch on a few forecasting methods, although there are many more approaches available to those managers who wish to do more. This week's article provides an overview of many forecasting methodologies and provides a framework through which you can explore their differences.
Your objective in this Discussion is to learn to analyze a specific forecasting situation and identify the best suited methodology. You will complete three steps.
Step 1: Describe a specific forecasting need in your organization.
Step 2: Use the provided table below to analyze the requirements of the forecasting problem.
Step 3: Identify the best matching forecasting methodology to your situation and describe how it would be executed.
In Step 2, the analysis will be based on the table shown on pages 4 and 5 of the article. This table lists several questions about the nature of the forecasting situation, such as the urgency, detail required, and costs factors, and provides an overview of how well various forecasting methodologies will fit those requirements. For example, some forecasting methods cost more than others and depending on your financial resources, some of them may not be suitable. The same holds true with the math skills available or the need for high accuracy. So understand what each category is referring to, fill in the information, and follow the table to see which methodology is recommended for your specific case. You are learning how to analyze your situation so as to pick the best approach. Please note that these 2 pages in the article (pages 4-5) go side by side. You may wish to print them out and place them next to each other to read across the rows comfortably. The table shown below is based on the table in the article.
Please use the template below in your answers, so everyone can easily follow your answers to all the questions (copy and paste to your post).
Use this format for your Unit 5 Discussion.
Forecast need
Describe what question this forecast aims to answer, and why it is important for your organization to have this information.
Forecast situation analysis
Identify a forecast method by filling in the table below. The full table is on pages 4-5 of the article. You should fill in the table by answering the questions in the "Questions" column. Your answers will lead you to the methods that are most suitable for your forecasting need.
Category
Dimension
Questions
Answer to the questions
Time
Span
Is the forecast period a present, short/medium, or long-term projection?
Urgency
Is the forecast needed immediately?
Frequency
Are frequent forecast updates needed?
Resource
Math skills
Are quantitative skills limited?
Computer
Are computer capabilities limited?
Financial
Are only limited financial resources available?
Input
Antecedent
Are only limited past data available?
Variability
Does the primary series fluctuate substantially?
Internal consistency
Are significant changes in management decisions expected?
External consistency
Are significant environmental changes expected?
External stability
Are significant shifts expected among variable relationships?
Output
Detail
Are component forecasts required?
Accuracy
Is a high level of accuracy critical?
Capability for reflecting direction changes
Should turning points be reflected properly?
Capability for detecting direction changes
Should turning points be identified early?
Form
Is an internal or probabilistic forecast critical?
Recommendations
Which forecasting methodology listed in the article is the best match to your situation?
Describe how this forecast will be executed: Who will do it, where will the data come from, how frequently will it be repeated, and how will the results be used?
Article - How to choose the best technique- or combination of techniques-to help solve your particular forecasting dilemma by David M. Georgoff and Robert G. Murdick
Manager's guide to forecasting