Qualitative Forecasting pdf

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Ch 4 Qualitative Forecasting
Using expert opinion and collective
experience to unlock the secrets of
the future.
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The keys to employing qualitative
forecasting are:
♦
Data as an historical
series is not available,or
is not relevant to future
needs.
♦
An unusual product or a
unique project is being
contemplated.
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Keys:-
♦
There are numerous variables
which will affect the project.
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Keys:
Sales by Year, With Automatic Twenty
Year Prediction
0
2000
4000
6000
8000

10000
1980 1990 2000 2010 2020 2030
Year
Sales
♦
The project’s life is longer than the
safe extrapolation of a time series.
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Keys:
♦
Experts are available, and should
debate the issues.
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Qualitative Forecasting:
Data From Expert Opinion
By Survey-
♦
Data can be gathered by phone or in writing.
♦
Data comes in three categories:
1. Highly valuable
2. Absolutely essential
3. Supporting material.
♦
The survey group is known as the ‘reference population’.
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Qualitative Forecasting:
Data From Expert Opinion
♦
Jury of executive opinion: senior managers

draw upon their collective wisdom to map out
future events. These discussions are carried out
in open meeting, and may be subject to the
drawbacks of group think and personality
dominance.
Using groups-
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Qualitative Forecasting:
Data From Expert Opinion
♦
The Delphi Method: drawing upon
the group’s expertise by getting
individual submissions, without the
drawback of face to face meetings.
Using groups-
The Delphi Method is named
after a famous Oracle who
prophesied in the ancient Greek
city of Delphi. An Oracle (wise
person) interceded between men
and gods.
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Qualitative Forecasting:
Data From Expert Opinion
Using groups -
♦
The Nominal Group Technique is a
face to face Delphi method, allowing
group discussion.
♦

The Devils Advocate method poses sub-
groups to question the group’s findings.
♦
The Dialectical Inquiry method poses
sub-groups to challenge the group’s
findings with alternative scenarios.
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Qualitative Forecasting:
Using Expert Opinion
1. Output from the group techniques is
sorted into scenarios.
2. These scenarios are further reviewed by
the group.
3. A final ‘consensus of opinion’ forecast is
accepted by the group.
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Qualitative Forecasting:
Summary
♦
Qualitative forecasting is used when
historical data is not available, or when
the planning horizon is very long.
♦
Qualitative forecasting uses expert
opinion, collected in a variety of ways.
♦
Collected expert wisdom has to be
carefully managed.
♦
Research shows that both the Delphi

Method, and the Nominal Group
technique, are reliable forecast methods.