Forecasting

Realised by : HAFID ABDEKRIM

Proposed By : Pr. Nabil LAMII
MST IMI : 2019/2021
INTRODUCTON

Every day, at all levels of management within all

segments of the air transportation industry,
decisions are
made about what is likely to happen in the future.
It has been said that business action taken today
must be based on yesterday’s plan and tomorrow’s
expectations.
Call them expectations, predictions, Projections —
it all boils down to one thing, FORECASTING.

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Planning P O I N T

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P O I N T

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Definition of Uses of
Forecasting Forecasting

P O I N T P O I N T

03 04

Forecasting Steps in the

methods Forecasting
Process

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1. What is
Forecasting?

• Forecasting is a tool used for predicting future demand based

on past demand information.
• It is the attempt to quantify demand in a future time period.

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Why is Forecasting
important?
Demand for products and services is usually uncertain.
Forecasting can be used for…
• Strategic planning (long range planning)
• Finance and accounting (budgets and cost controls)
• Marketing (future sales, new products)
• Production and operations

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2. Uses of Accounti ng
Forecasting Cost
Profit estimates

Marketing Finance
Pricing, Cash flow
Promotion, and funding
Strategy

Human Resources
Hiring,
Recruiting,
Training 5
3. FORECASTING
METHODS

Following are the methods of forecasting:

• Casual method
• Time Series Methods
• Judgmental methods
• Qualitative and Quantitative Methods

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 Casual method
•Causal forecasts are based on a statistical relationship between the
forecasted variable and one or more explanatory variables. There need not be
a cause-and-effect relationship between the dependent and the independent
variables.
• Causal model is constructed by finding variables that explain, statistically,
the changes in the variable to be forecast.
Time Series Forecasting Method
•The time series type of forecasting methods, such as trend analysis,
employ historical data to estimate future outcomes. A time series is a
group of data that’s recorded over a specified period.
Judgmental method
•Judgmental methods can be used when either no information or very little
historical data exist. They can also be used to adjust forecasts developed by
causal models or through time-series analysis.
• Acceptance or rejection of a judgmental forecast depends mostly on the
reputation of the forecaster, because there are no statistical ways to evaluate
it. very often, a strong leader can push through recommendations based on
such forecasts
Qualitative and Quantitative Forecasting Method
• Whereas personal opinions are the basis of qualitative forecasting
methods, quantitative methods rely on past numerical data to predict the
future. 
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 • Deriving future demand by asking the person closest to the customer.
•Grass Roots

• Trying to identify customer habits; new product ideas.

•Market Research
Qualitative forecasting methods

• Deriving future estimations from the synergy of a panel of experts in the

•Panel Consensus area.

• Identifying another similar market.

•Historical Analogy

• Similar to the panel consensus but with concealed identities.

•Delphi Method

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 •Time Series • Models that predict future demand based on past history trends.
Quantitative forecasting methods

• Models that use statistical techniques to establish relationships between

•Causal Relationship various items and demand.

• Models that can incorporate some randomness and non-linear effects.

•Simulation

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 FORECASTING

4. Steps in the
Forecasting
Step 6 Monitor the
forecast

Process Step 5 Prepare the forecast

Step 4 Gather and analyze data

Step 3 Select a forecasting technique

Step 2 Establish a time horizon

Step 1 Determine purpose of forecast

CONCLUSION

Forecasts serve as decision support tools that allow

leaders to plan for the future by performing “what-if”
analyses to determine how changes in inputs affects
outcomes.

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