Principles of Forecasting

Many types of forecasting models that differ in complexity and amount of data & way they generate forecasts: 1. Forecasts are rarely perfect 2. Forecasts are more accurate for grouped data than for individual items 3. Forecast are more accurate for shorter than longer time periods

Types of Forecasting Methods

Decide what needs to be forecast
Level of detail, units of analysis & time horizon required

Evaluate and analyze appropriate data

Identify needed data & whether its available

Select and test the forecasting model

Cost, ease of use & accuracy

Generate the forecast Monitor forecast accuracy over time

Types of Forecasting Methods

Forecasting methods are classified into two groups:

Types of Forecasting Models

Qualitative methods judgmental methods Forecasts generated subjectively by the forecaster Educated guesses Quantitative methods based on mathematical modeling: Forecasts generated through mathematical modeling

Qualitative Methods
Type Executive opinion Characteristics Strengths Weaknesses A group of managers Good for strategic or One person's opinion meet & come up with new-product can dominate the a forecast forecasting forecast Uses surveys & Good determinant of It can be difficult to interviews to identify customer preferences develop a good customer preferences questionnaire Seeks to develop a Excellent for Time consuming to consensus among a forecasting long-term develop group of experts product demand, technological changes, and

Market research

Delphi method

Quantitative Methods
Time Series Models:
Assumes information needed to generate a forecast is contained in a time series of data Assumes the future will follow same patterns as the past

Causal Models or Associative Models

Explores cause-and-effect relationships Uses leading indicators to predict the future Housing starts and appliance sales

Technology Forecasting
Looking into the Future

Normative Approach

Descriptive Approach

Desiderable

Possible

Probable

Question 1: what happens to object A in time T if free to evolve ?

Technology Forecasting
Looking into the Future

Normative Approach

Descriptive Approach

Desiderable

Possible

Probable

Question 2: what happens if we change object C ?

Forecasting of Technology
Technology Applying a systematic technique, method or approach to solve a problem1 Forecasting of Technology . . .
Forecasting of Applying, Forecasting of Systems, Forecasting of Techniques/Methods, Forecasting of Solve, Forecasting of Problems.
Note 1 a.The application of science, especially to industrial or commercial objectives. b.The scientific method and material used to achieve a commercial or industrial objective.

Forecasting of Technology
Technological System

Engine Primary Function Product

Control

Transmission

Working Means

Es.:Forecasting of Machine Tooling

Grinder

Motor

Control Unit

Transmission

machine

Work Piece

Tool

Es.:Forecasting of Photographic Camera

Camera

Motor

Microprocessor

Focus adjust

record

light

Lens Set

Methods for Technology Forecasting

Available Information Tacit Knowledge (Exp.)
Another Comparable System Observation from System

Methods
Delphi Analogy Methods Extrapolation

Back Link >>

1 1 0 n

Variables to be predicted
Phenomena

Statistics
Causal Relations

Methods for Forecast of Technology

Forecasting of Technology Technology Applying a systematic technique, method or approach to solve a problem1 Forecasting of Technology . . .
Forecasting of Applying, Forecasting of Systems, Forecasting of Techniques/Methods, Forecasting of Solve, Forecasting of Problems.

Methods for Forecast of Technology

"TIPS" is the acronym for "Theory of Inventive Problem Solving" "TRIZ" is the acronym for the same phrase in Russian TRIZ was developed by Genrich Altshuller and his colleagues in the former USSR starting in 1946, and is now being developed and practiced throughout the world. The research has proceeded in several stages over the last 50 years. Over 2 million patents have been examined, classified by level of inventiveness, and analyzed to look for principles of innovation.

Methods for Forecast of Technology

TRIZ Basics Achievements:
1. Problems and solutions were repeated across industries and sciences 2. Patterns of technical evolution were repeated across industries and sciences 3. Innovations used scientific effects outside the field where they were developed

TRIZ forecasting
consists these major phases:
1. 2. 3. 4. Analysis of the system's evolution: study of the history of the system and its position on its "life curve" (S-curve) "Road mapping: application of the Laws and Lines of Technological Systems Evolution to forecast functional and structural alterations in the system Problem formulation: formulation of engineering problems to be solved so as to achieve targets set at the previous phase Problem solving: solving the formulated problems by using powerful analytical and solution tools of TRIZ

Analogy

Extrapolation

Statistics

Causal Relations