Management and Organizational Studies 3330A/B Lecture Notes - Lecture 1: Ensemble Forecasting, Average Absolute Deviation, Linear Regression

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3330A/B
• Professor: Oneil

Document Summary

Forecasting is one of the most important business functions because all other business decisions are based on a forecast of the future. Chapter 8 reading notes: forecasts are rarely perfect. Forecasting the future involves uncertainty: forecasts are more accurate for groups or families of items rather than for individual items. When items are grouped together, their individual high and low values can cancel each other out: forecasts are more accurate for shorter than longer time horizons. Th e shorter the time horizon of the forecast, the lower the degree of uncertainty. basic steps that should be followed when making a forecast: decide what to forecast, 2. Evaluate and analyze appropriate data: select and test the forecasting model, generate the forecast, monitor forecast accuracy. Qualitative forecasting methods, often called judgmental methods, are methods in which the forecast is made subjectively by the forecaster. Executive opinion is a forecasting method in which a group of managers meet and collectively develop a forecast.