Reference no: EM132804725

As the regional manager of 20 restaurants, you are considering to expand the number of outlets in the local area. What types of forecasts would you want to create in order to support your decision?

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Demand Forecasting: Types, Methods, and Examples | Red Stag Fulfillment

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The choice of a forecasting process depends on conditions in the operating environment, including the time horizon for management decisions, the level of detail that the user of the forecast needs to support decisions, the number of products for which the process must generate forecasts, the decision makers' emphasis on control or planning needs, the constancy of forecasted events, and the firm's current methods for developing forecasts. Forecasting methods fall into two categories: judgment-based and statistical model-based methods. Judgment-based approaches gather inputs through grassroots methods, executive judgment, focused forecasting, historical analogy, market research, and the Delphi method. These techniques are appropriate in those situations where past data are either unavailable or no longer appropriate. They are also appropriate for forecasting technological innovations (another use of forecasting). Statistical model-based forecasting approaches try to extend the past by decomposing historical time series data and other causal factors into seasonal, trend, and other components to reveal the residual effects of unique, current forces on demand.