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Operations And Supply Chain Management
Found in: Page 476
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Short Answer

Question: What category of forecasting techniques uses managerial judgment in lieu of numerical data?

Answer

Forecasting is the basis of corporate planning and control, and for taking each management, decision forecasting plays a major role in every business organization.

See the step by step solution

Step by Step Solution

Step 1: Forecasting techniques

Forecasting techniques can be qualitative or quantitative. Qualitative techniques of forecasting use managerial judgment for estimating demand, and quantitative techniques of forecasting use quantitative forecasting models for estimating demand

Step 2: Category of forecasting techniques uses managerial judgment instead of numerical data

The qualitative forecasting technique uses managerial judgment instead of numerical data and generally takes advantage of the knowledge of experts and needs much judgment. These techniques typically include processes that are well defined.

For example, in the case of forecasting the demand for new fashion merchandise in a retail store, the firm can include a combination of input from typically customers expressing preferences and from store managers who understand product mix and store volumes, where they view the merchandise and run through a series of exercises designed to bring the group to a consensus estimate.

The point is that there are no wild guesses about the expected demand, but it involves a well-thought-out and judgmental and structured decision-making approach. Following are the samples of qualitative techniques of forecasting:-

  1. Market research
  2. Panel consensus
  3. Historical analogy
  4. Delphi method

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