Qulitative Methods
Qualitative model require mainly judgement techniques which rely on the subjective judgments, experience and the analysis capability of a person or group of people. As there is no need for any expansive software or hardware, therefore, the development costs are quite low.
Forecasts which carried out by using qualitative methods can also be developed fairy quickly, specially when the forecaster is experienced and has well understanding in the market, which in many cases are the executives of the company, they have solid understanding on wide variety of factors and the possible affect to sales demand. However, this would also become a drawback, whereas the judgement methods often tend to be biased toward the forecast developer. In some cases, executives who develop the forecast may not really understand the sale situation as they are not actually in the marketplace. (Chase C, 2009)
The survey carried out by Lawrence et al.(2006) also shows, the in information used in judgment methods are usually included bias, as judgmental forecasters use different ‘heuristics’ to collecting the information, and combining the information without resort to any explicit weighting scheme. Therefore, negative consequences are presented on the failures in produce the most precise and efficient forecasts, as the fault in producing optimal incorporated information.
Although there are limitations in qualitative methods, the methods are still the most widely used forecasting method in present business. “it is important to realize that some subjective assessment is usually involved in all types of demand forecasts”(Chase C, 2009). Here will introduce the 5 most widely use qualitative methods (also the 5 in syllabus).
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