Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Forecasting
Essential preliminary to effective
planning
Engineering manager must be
concerned with both future markets
and future technology
Why Forecasting?
New facility planning
Production planning
Work force scheduling
Types of Forecasting
Methods
Forecasting methods are classified
into two groups:
Wiley 2010
Forecasting
Qualitative Methods
Judgment Methods
Jury of Executive Opinion
Delphi
Simplest method
Executives provide an estimate
Educated guess
Average of estimates taken
Delphi Method
Eliminates effects of interactions
between members
Experts do not need to know who
other experts are
Delphi coordinator asks for opinions,
forecasts on subject through
questionnaires
Qualitative Methods
Wiley 2010
14
Forecasting
Quantitative Methods
Time Series Methods
Moving Average
Weighted Moving Average
Exponential Smoothing
Quantitative Methods
Time Series Models:
Assumes information needed to generate a
forecast is contained in a time series of data
Assumes the future will follow same patterns as
the past
17
Wiley 2010
18
Ft 1 At
Simple Mean:
Moving Average:
Ft 1 A t / n
19
1/n
...
3 2 1
today
Ft 1 Wt A t
(
A
F
)
n
1
n
n
n
A
1
2
F
(1
)
A
(1
)A
1
n
n
1
n
Exponential Smoothing:
Math
Exponential Smoothing:
0(1)1
today
23
Exponential Smoothing:
Thus, new forecast is weighted sum of old forecast
and actual value
Notes:
Only 2 values (An and Fn ) are required, compared with n for
moving average
Parameter determined empirically (whatever works best)
Rule of thumb: < 0.5
Typically, = 0.2 or = 0.3 work well
Dependent
variable
Regression Analysis
Dependent
variable (y)
y = b0 + b1X
b0 (y intercept)
B1 = slope
= y/ x
Whats Slope?
A slope of 2 means that every 1 unit change in
X yields a 2 unit change in Y.
2010 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,
storage in a retrieval system, or transmission in any form or by means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions
Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.
Whats Prediction
If you know something about X, this knowledge
helps you predict something about Y.
Dependent
variable
Observation: y
Prediction: y^
Zero
Independent variable (x)
Observation: y
Prediction
error:
Prediction: y^
Zero
Dependent
variable
Regression
y = A + X + X + + k Xk +
1
Multicollinearity
Multicollinearity is a condition in which at least 2
independent variables are highly linearly correlated. It
will often crash computers.
Example table of
Correlations
Y
X1
1.000
X1
0.802
1.000
X2
0.848
0.578
X2
1.000
Nonlinear Regression
Which Method?
Select a few methods
Make forecasts
Take simple average
No one best answer
Technological Forecasting
Which technologies will be available in
the future
Part of planning as this is the context in which
plans will operate or be implemented
Delphi Method
Internet
Cookies
Demographics
Trends
Government Regulations