• What is forecasting?
•• Primary Function is to Predict the Future
•• Why are we interested?
•• Affects the decisions we make today
•• Examples: who uses forecasting in their jobs?
•• forecast demand for products and services
•• forecast availability of manpower
•• forecast inventory and materiel needs daily
Characteristics of Forecasts
• They are usually wrong!
•• A good forecast is more than a single number
•• Error and range (high and low)
•• Aggregate forecasts are usually more accurate.
•• Less accurate as we go further into the future.
•• Forecasts should not be used to the exclusion of known
•information (info not presented in the history of the studied
What Makes a Good Forecast?
• It should be timely
•• It should be as accurate as possible
•• It should be reliable
•• It should be in meaningful units
•• It should be presented in writing
•• The method should be easy to use and understand in most cases.
•• Ease of updating as new data becomes available.