Running head: Forecasting 1

Forecasting
Donald G Miller Jr.
Brandman University
Operations Management
Charles Muse
September 19, 2014










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Introduction
Forecasting is a necessary task in the world of business, but which method works best?
Now there might not be a one size fits all for forecasting, but there are methods that work best
for particular situations. Throughout this paper a scenario will be picked for the qualitative and
quantitative methods, this will show merits and shortcomings of both techniques and procedures.
Analysis
First to be examined is the qualitative method of forecasting. According to
BusinessDictionary.com, the qualitative forecasting technique is defined as an estimating
method that relies on expert human judgment combined with a rating scale, instead of on hard
(measurable and verifiable) data (BusinessDictionary, 2014). In the maintenance world of the
Air Force, the use of qualitative forecasting is used on a daily basis. For example, with a new
fiscal year coming the upper echelon of management will be trying to predict where to allocate
funds, more specifically at the base I am stationed at, Travis Air Force Base. Working directly
with the Air Force Reserve I see how money is spread amongst the squadrons, which then is
allocated to the flights. Working in a maintenance shop, damage airplanes are what secure
funding. However, we can really predict how heavily damaged a jet will be when it rolls in, this
is when qualitative forecasting comes into play. Many factor can come into play when evaluating
necessary manpower for maintenance. When management begins this process they will gather
flight schedules for all assigned jets, scheduled maintenance, previous trends of repairs needed,
and reports of maintenance previous completed (this could be modifications, overhauls, etc.).
There are also those unforeseen maintenance tasks that are needed to keep the mission going.
Scenario planning would take a huge part in this sort of forecasting, with the less and stable
maintenance undertaking a lot of expert opinion and intuition is taken into account.
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Second there is the quantitative forecasting method, defined as a statistical technique for
making projections about the future which uses numerical facts and prior experience to predict
upcoming events (BusinessDictionary, 2014). Using another scenario for funding in the Air
Force, and how those funds are allocated. Every year when the budget is approved, and funds
find their way to the unit, there is an objective process in coming to these figures. We first look
at funding over the past three years, whether it has gone up or down, a figure from this is the
starting point. Next looking at the overall impact percentage of any given unit will have towards
accomplishing the Air Forces mission. Finally, considering the number of people assigned to the
unit a further percentage is established. Continuing down the quantitative method, we would add
all the numbers and factors to reach an ultimate amount to be allocated to the units.
Both of these methods have their strengths and weakness. While our environment isnt
perfect and sometimes it takes the perspective of an expert to adjust for those inconsistences, at
times our human emotions can fog critical decision-making. On the flip side sometimes numbers
can be deceiving, or if your looking at a new venture to explore the numbers my not be there, so
an expert opinion would be crucial to the decision-making process. One might not be better than
the other, they both have qualities to set any situation up for success, it is just a matter of figuring
out how the company wants to approach the task at hand.
Conclusion
To conclude forecasting, whether subjective or objective, is a critical part of doing
business. This paper has discussed the qualitative and quantitative methods of forecasting,
coupled with the definitions a scenario to explain the process of each.


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References:
BusinessDictionary. (2014). Definition- Qualitative. Retrieved from:
http://www.businessdictionary.com/definition/qualitative-forecasting-technique.html
BusinessDictionary. (2014) Definition- Quantitative. Retrieved from:
http://www.businessdictionary.com/definition/quantitative-forecasting.html




































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