Quantitative Forecasting Techniques
(Definition) An approach to forecasting where historical demand data are used to project future demand. Extrinsic and Intrinsic techniques are typically used.
Qualitative Forecasting Techniques
(Definition) An approach to forecasting that is based on intuitive or judgmental evaluation. It is used generally when data are scarce, not available, or no longer relevant. Common types of qualitative techniques include: personal insight, sales force estimates, panel consensus, market research, visionary forecasting, and the Delphi method. Examples include developing long-range projections and new product introduction.
- Good forecasting is best done with combination of quantitative and qualitative considerations.
- When using combination methods, both the quantitative forecast and the qualitative adjusted forecast can be measured separately for error to determine the degree to which qualitative methods are helping or hindering forecasting.