Describe when to use of a time series forecasting techniques and what assumption are made?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

Describe when to use of a time series forecasting techniques and what assumption are made?

Expert Solution
Introduction

Statistical approaches are used to forecast variables by analysing historical data. Forecasts are generated by analysing historical data trends. This signifies that no prior information is required to predict the variable. The fundamental idea is that previous or historical patterns are effective indicators of upcoming or future developments. On the other hand, Causative techniques illuminate the functional link between variables and, as a result, the independent variables or predictors that impact the variables' behaviour. The basic assumption is that the projected variable will have a cause-and-effect relationship with other variables. The prediction in this scenario is based on a number of factors and probabilities, which is not the case with statistical approaches. Forecasting statistics are a method or procedure for forecasting events using statistics. By analysing past trends, statistical forecasting methodologies provide forecasts regarding longer-term or imminent occurrences. On the other hand, the casual approach predicts events by assuming variables that are likely to affect or change in the future. a some of the fundamental premises

 

 

steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.