QUANTITATIVE ANALYSIS FOR DECISION MAKING Essay Example | Topics and Well Written Essays - 500 words

QUANTITATIVE ANALYSIS FOR DECISION MAKING - Essay Example Long-range forecast involve timeframes of over three years involving capital expenditures, R&D, new product planning and expansion (Heizer & Render). There are two different approaches of forecasting. The first approach is subjective or qualitative where factor’s such as the manager’s intuition, experience, emotions and opinion are utilized in reaching a forecast. The second quantitative approach involves the use of some historical data coupled with the use of some mathematical models in order to predict possible future outcomes. The qualitative approach is often useful in estimating sales for certain new consumer products or services that rely heavily on customer needs and preferences. Under the qualitative approach to forecasting there are four different types of methods used (Heizer, et. al.): Jury of executive Opinion- the opinion of a group of high level managers or decision makers is used in combination with some statistical models to arrive at a conclusion Sales Force composite- the individual salesperson sales forecasts are all combined and reviewed for accuracy in order to determine an overall forecast. Delphi Method- in these approach there are three types of participants: staff personnel, respondents and decision makers. The decision makers typically consist of a panel of 5 to 10 experts who will be making the actual forecasts.