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How to Choose the Right Forecasting Technique
Two Corning Glass Works products illustrate the use of various forecasting techniques. Managers and forecasters should consider three issues when approaching a forecasting problem: the purpose of the forecast, the dynamics and components of the system, and the importance of the past in estimating the future. The three basic forecasting methods are qualitative techniques, time series analysis and projection, and causal methods. A gatefold chart presents several examples of each type of technique, its feaures, and limitations. Although sales forecasting primarily has used forecasting techniques, these techniques will be applied increasingly to forecasting margins, capital expenditure, and other important factors.