Assessment Task 2: Questions – Defining and Outlining Forecasting Tools
Define the following research methods, give examples of appropriate applications to international forecasting:
- Bottom-up forecasting – it is a detailed budget which comprises of the plans for spending by a department which is actually the operational expense plan less the expenses of depreciation then plus the capital expenditures. For instance, the account manager may put a volume forecast in by week against all the ski’s expected to be sold. The prices are input by ski and have a basic P + L for that account.
- Delphi technique is a systematic approach of making decisions which involve the structured interaction of a group of experts on a certain issue. The method is used to forecast and make decisions whereby the forecasters consecutively assemble the judgment of the experts. [1]For instance, it can be used to combine the opinions of the experts on the probability and the anticipated expansion time.
- Model building is a function which identifies and mounts models for decision-making in order to solve a given problem by considering the input variables and their interrelationships, constraints, and model assumptions. It is an iterative process for mounting a model starting with some information concerning the form of the problem and having some relevant data. For example, it can be used to forecast disease patterns and health requirements and addressing clinical problems or to substitute the conventional meetings, hence avoiding group pressures.
- Projection refers to an appraisal of what is probably to happen in the future considering the current situation, trends or whatever is happening at the moment the actual demand can be calculated using the current actual demand and using the equation.
- Scenario planning is a practice of developing varying courses of action for an organization to implement on grounds of the potential events known as scenarios. It is a structured way used by organizations to predict the future whereby the executives develop a small number of stories concerning how the future might unfold and how this might impact the issue confronting them and make flexible long-term plans[1]. Examples include: what will be the deficit value of Canada next year? What is the expected impact of the global warming? How much oil will be available in the year 2030?
- Surveys of intentions is a forecasting tool which is used to make decisions based on the interests of a customer in a certain product or service to predict their demand and requirement in a future period. For instance, observing the sales volume and demand of a certain product can help to predict the sales for the company.
- Top-down forecasting – it is a demanding process of estimation whereby the product demand predictions for a business are generated for the higher product group level first and then projected downwards to the lower levels. For instance, the combined data on sales of all the products can be used and then apply these statistical methods to predict the sales of individual items. Is an approach whereby the forecaster uses the sales data to come up with predictions for every item in each sales area. The statistical methods then sum up the item forecasts in order to develop the forecast at the higher group level.
Give examples of software applications that are commonly used in market analysis and forecasting and outline their key features.
- Adaptive Insights – it is a cloud-based software delivered over the web in a software-as-a-service. (SaaS). Has data visualization which enables the users with faster insight. Has customizable reports and drag-and-drop report builder. It also has an easy-to-use interface and automatic data consolidation. Has flexible forecasting and budgeting tools. Has self-service reporting and automated currency exchange calculations. Has revenue planning and sharing documents features.
- MM4XL Software – the tools are available in in one single Excel add-in software. It provides scenario modeling and simulation and offers marketing examples.
- IBM Marketing Cloud – It is designed to manage data and has design and automated customer experiences. It also uses embedded analytics and has other feature such as the IBM Digital Marketing, Journey Design, IBM Analytics, campaign automation, and IBM Lead Management.
- Percolate – is a system used to keep the records of marketing that helps to see, organize and enhance the marketing activities[2].
- GMDH Shell – it is a windows application and the fastest way to forecast time series. Has plug-ins that draw their panels into the host window. It has a sidebar and tabs for plugging in the panels. Has great core algorithms optimization. Has templates which can be customized to match the user’s preferences. It has multiple languages and fast evaluations. It has multiple users and customizable platform.
- Marketo – has automating tools, sales management dashboards, analytics and lead management tools. It also allows inbound marketing and has been registered on NASDAQ.