FORECASTING TECHNIQUES
1. Anticipatory surveys:
a. Expet Opinion Delphi
Technique:
A systematic
forecasting method that involves structured interaction among
a group of experts on a subject
b. Cross-Impact Analysis:
Analysis of high importance and high probability
c. Multiple scenario: building of pictures of alternative futures.
2.Trend Analysis method: based on time series
a. Trend Extrapolation: analyze and
fit time series data( Linear quadratic or s shaped growth curves)
b. Trend correlation: It also
know as barometric or indicator approach.
Leading Indicators: To know the
economic direction in advance eg., rainfall
Coincidental
Indicators: Economic factors reaching
approximately at the same time as the economy
eg., GNP, Interest rates
Lagging
Indicators: Economic factors reaching
their peaks or troughs after the economy has already reached its own.
eg., Unemployment and inventory
debtors.
3. Diffusion Indexes : It is an
indicator of spread of an expansion.
a. Composite or consensus Index:
It combines several indictors into one single measure .
Eg: Diffusion Index:
No of members in the set in the same direction /
Total no of members in the set
b.
Component Evaluation Index: It measures
the breadth of the movement within a particular series.
4. Monetary Indicators: Deals with
money supply, corporate profits, interest rates and stock prices
sprinkle observed.
5. Econometric Model: It explains
past economic activity by deriving mathematical equation. Eg.,
Disposable Income Inventories.
6. Opportunistic model:
a. Hypothesis of total demand: Deals
with environmental decisions as war or peace
b. Test of consistency and comparison: Measure the internal consistency and comparing with other projections.
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