FORECASTING

NAVIE

1) Briefly explain the Delphi Method and its purpose. List the benefit(s) and
weaknesses.

- Delphi Method is a forecast method. It’s a research design, that could be

qualitative or quantitative based on the there are or not pattern. If the data are
consistent therefore there is a pattern the quantitative method is the used one.
If the data are not consistent therefore there is not pattern the qualitative
method is the used one. The object is to obtain the most reliable opinion pull
from a group of experts. The technique uses a series of rounds where
information is given back to the participants, that are all experts in their field,
for review. The participants work anonymously, they don’t know who the other
participant might be. The goal is to achieve a consensus among the experts
about the best future solutions for a problem. The benefit is that since is
anonymous the opinions of one do not affect the opinions of all. Everyone will
have the opportunity to consider and reconsider their answers, The weaknesses
are that this kind of research takes more time, participants have to be experts,
the possible delay in data collection between rounds and analysis process.

2) List three methods of confirming qualitative forecasts

- Sales People

- Top Management

- Delphi method

3) Consider the following data:

month Demand
January 400

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 February 450
March 390
April 420

a) Find the Naive forecasts for the months of Feb., Mar., and Apr.
- Feb = 50 MAE= (50+60+30)/3 = 46.67
- Mar.= -60 MSE = 2333.33
- Apr.= 30

b) Find the SMA2 forecasts for the months of Mar. and Apr.
Period Value Forecast
1 400
2 450
3 390 425
4 420 420

Forecast = 405
MSE = 612.5
MAD = 17.5

c) Find the WMA2 forecasts for the months of Mar. and Apr. W 1=0.40 and
Period Value Forecast W2=o.60.
1 400
2 450
3 390 430
4 420 414

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 Forecast = 408
MSE = 818
MAD = 23

d) Find the Exponential Smoothing forecasts for the months of Feb, Mar., and
Apr. ALPHA=0.40. Assume the forecast for Jan. is 400.

Foreca
Period Value st
1 400 400
2 450 400
3 390 420
4 420 408

Foreca
st = 412.8

1181.3
MSE = 33

30.666
MAD = 67

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