[Solved] Which of the following is a technique used for forecasting? (2024)

Explanation:

Forecasting

• Forecasting is defined as estimating the future value that a parameter will take. Most scientific forecasting methods forecast the future value using past data.
• Some simple forecasting models using time series data are simple average, moving average and simple exponential smoothing.

Moving average Method or rolling average Method:

• In this method, fresh average is calculated at the end of each period by adding the actual demand data for the most recent period and deleting the data for the order period. It givesequal weightto each of the most recent observations.

\({F_{n+1}} = \frac{{{D_1} + {D_2} + {D_3} + {D_4} + \ldots \ldots \ldots \ldots \ldots \ldots + {D_n}}}{n}\)

Weighted moving average Method:

• This method gives unequal weight to each demand data with more weight to recent data.

\({F_{n+1}} = \left[ {{w_{1}} \times {D_{1}} +{w_{2}\times {D_{2}}} +..........+ {w_{n}} \times {D_{n}}} \right]\)

ExponentialSmoothingMethod:

• This method gives weight to all the previous data and the pattern of weight assigned isexponentially decreasing in order with most recent data is given the highest weight.
• In exponential smoothing method of forecast, the forecast for the next period is equal to

F_t=α D_t-1+ (1 -α) F_t-1

where, D_t-1= latest figure sale or latest demand, F_t-1= old forecast,α = exponential smoothing constant

Additional Information

Project

• A project may be defined as a combination of interrelated activities which must be executed in a certain order before the entire task can be completed.
• The aim of planning is to develop a sequence of activities of the project so that the project completion time and cost are properly balanced.
• To meet the objective of systematic planning, the management has evolved several techniques applying network strategy.
• PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are network techniqueswhich have been widely used for planning, scheduling and controlling the large and complex projects.

Difference between PERT and CPM (Critical Path Method)

Gantt charts:

• Gantt charts are mainly used to allocate resources to activities.
• The resources allocated to activities include staff, hardware, and software.
• Gantt charts are useful for resource planning. A Gantt chart is a special type of bar chart where each bar represents an activity.
• The bars are drawn along a timeline.
• The length of each bar is proportional to the duration of time planned for the corresponding activity.

Control charts:

• Control chart is agraphical representationof the collected information.
• Itindicateswhether a process is incontrol or out of control.
• It determines process variability and detects unusual variations taking place in a process.
• It ensuresproduct quality level.
• It provides information about the selection and setting of tolerance limits.