Types of Judgmental Forecasting Techniques (Research Paper Sample)
Types of Judgmental Forecasting techniques, and The Delphi Method of Judgmental Forecastingsource..
Overview and Introduction
Judgment forecasting is applied to multiple disciplines and practices since it is the most preferred option in situations such as when a product is being launched, when there exist new competitors in the market and a complete lack of historical data. According to Petropoulos et al. (2018), judgmental forecasting integrates a well-structured and systematic approach, which helps to minimize and evade the adverse effects that limit the application of judgmental forecasting. The main principles of the forecasting method include clearly and concisely setting the forecast task, implementing the forecast approach, document and justify, systematically evaluate forecast, segregation of forecasters and users. The principles enable proper research of sources related to judgmental forecasting methods to effectively acquire reliable information. With the application of the forecasting principles, general settings can be used, such as when there is no data available or when data is available. When data is available, statistical forecasts are generated based on the research or forecast projections to project judgment. Therefore, various sources of judgmental forecast are used with the data available, for instance, individual opinions, intuitive judgment, and subjective probability estimates. This paper assesses the concept of the judgmental forecast using the commonly used methods and determining the effectiveness of the forecasting method.
What is Judgmental Forecasting
Judgmental forecasting involves using subjective information to arrive at a certain conclusion or anticipate the outcome of certain situations and circumstances. A person who is referred to as a judgmental forecaster is considered knowledgeable of the prevailing situation within the practice and makes forecasts relating to the field under study (Petropoulos et al., 2018). The forecaster considers using qualitative information that relies on plenty of subjective feelings to anticipate future events or outcomes. Additionally, the methods incorporated into Judgmental forecasting include subjective probability estimates, intuitive judgements and opinions.
Types of Judgmental Forecasting techniques
Forecasting involves making predictions concerning the past and present documents and commonly through analyzing trends. Salehzadeh et al. (2020) denote that there are various types of judgmental forecasting methods, which are applicable in different circumstances and situations. The major techniques applied include composite forecasts, statistical surveys, Cooke's method, Delphi, and technology forecasting. These methods depend on the quantitative information that facilitates adequate data for the intended projections and trends analysis. The Delphi technique is commonly based on multiple sets of a questionnaire sent to a group of forecasters and involves certain steps for adequate efficiency.
Where is Judgmental Forecasting Used Most Effectively?
Business institutions such as sales and marketing apply judgmental forecasting methods to attain the firm’s goals and objectives. Trönnberg and Hemlin (2019) articulate that marketing involves investigating the existing market environment, businesses, competitors and products available in the market. Therefore, to anticipate certain outcomes in the market niche, judgmental forecasting is essential and equally reliable. On the other hand, investment in various securities such as shares, stocks and options, the forecasting methods have proved to effectively provide reliable information to make future investment decisions. The types of forecasting methods such as scenario planning and the Delphi method prove to be efficient with the help of forecasters and research experts.
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