As the company prepares to meet demand and capacity requirements for its planned future growth, you have been asked to review the current forecasting strategy and help implement a new strategic plan for forecasting demand. The new forecasting plan ties directly to the overall strategic planning methodology established by the company. The company historically has used a time series method. The forecasting methods under consideration are the following
Qualitative: Human judgment, usually best used when little data is available
Simulation: The use of computer models or judgment to imitate customer behavior
Causal: Used when there is a direct tie between demand and an environmental factor, such as cold weather
Time series: The use of historical data to predict future needs
Using course materials and other research, complete the following:
Identify which forecasting technique or multiple techniques should be used in the future for the company's strategy. Are there other techniques available that are not listed above?
Explain the technique you identify, and give an example of how it is used in the manufacturing, retail, and health care industries.
Detail if 1 of the 4 techniques listed above should NOT be used and why.
Evaluate the significance of forecasting error for the technique or techniques you have selected. What is the impact of error on your chosen technique?