Discuss the differences between a causal model and a time-series model. Be sure to provide examples to illustrate your understanding of these concepts.
Discuss the differences between a causal model and a time-series model. Be sure to provide examples to illustrate your understanding of these concepts.
Causal model of forecasting is an approach that would predict or forecast the futuristic events based on a range of the variables that are likely to influence the movements in future within the market place. This would determine the kind of the impact these variables would have on, for example, demand of consumers and the type of pricing that would be supported on a long run and the impact these changes would implicate on the company.
Casual forecasting is primarily helpful in areas such as development of sales, promotions and creating advertisement campaigns in a future period of time.
One major benefit of the casual forecasting relies on the ability to prepare for what can be more likely to occur in the future. Based on these projections and their outcomes, there might exist various benefits for the firm to start increased production currently with respect to the anticipation of the demand in future. A deep and focused forecast would benefit the firms to get thoroughly prepared in view of any sort of downturns.
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