Professional Documents
Culture Documents
Submitted by-
VEDANTI JAIN
SHOBHIT
KRISHNA
Business Forecasting
Forecasting aims at reducing the area of
uncertainty that surrounds management decision
making with respect to costs, profits, sales,
production, pricing, capital, investment etc.
Creation of plans of action.
Monitoring.
Competition.
4. Analysis of data.
Quantitative method.
Qualitative method.
Simple moving average method.
Exponential smoothing.
Regression analysis.
Executive committee / Jury of executives.
Delphi method.
Survey of sales force.
Survey of customers.
Market survey.
EXPONENTIAL
SMOOTHING
This method for forecasting is an outgrowth of
recent attempts to maintain the smoothing
function of moving averages without their
corresponding drawbacks and limitations.
To compute a moving average forecast it is
necessary to store the last ‘N’ observation values.
In the method of moving averages weight is
given to each of the last observation (1/N).
FT=FT-1+a(DT-1-FT-1)
Where;
FT=forecast for the current period
FT-1=forecast for previous period
DT-1=actual demand/sale/revenue for previous
period
a=smoothing constant=2/n+1
n= number of period
FOR THE YEAR 2008:
FT=? FT-1=13623 AT-1=18685 a=2/1+1=1
[FT=FT-1+a(DT-1-FT-1) ]
=>FT=13623+2/1+1(18685-13623)
=13623+5062=18685
Revenues Fiscal 2010 Fiscal 2009 Fiscal 2008 Fiscal 2007 Fiscal 2006 Fiscal 2005
International
27,431.02 25,630.76 20,573.90 17,003.22 11,607.08 8,560.90
Revenue
Domestic
2,597.90 2,182.12 2,045.62 1,681.99 1,656.91 1,187.57
Revenue