criteria in demand forecasting - b.e (c s / it), dr. k.baranidharan, sri sairam institute of...

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Prepared by :Dr. K. BARANIDHARANPROF.MBASRI SAIRAM INSTITUTE OF TECHNOLOGYCHENNAI

ENGINEERING ECONOMICS AND FINANCIAL ACCOUNTINGSri Sairam Institute of Technology2Engineering Economics& Financial AccountingEe&fa

35 August 2014

Criteria in good forecasting

Criteria for good forecasting. Joel Dean lays down the following criteria of good forecasting method:-Accuracy :- forecast must be accurate as far as possible. Its accuracy must be judged by examining the past forecast with present situation.Plausibility :- it implies managements understanding of method used for forecasting. It is essential for a correct interpretation of the results.Simplicity :- a simpler method is always more comprehensive than a complicated one. Economy :- it should yield quick results. A time consuming method may delay the decision making process.Quickness :- it should yield quick results. A time consuming method may delay the decision making process.Flexibility : - not only the forecast is to be maintained up to date there should be possibility of changes to be incorporated in the relationships entailed in forecast procedure, time to time.