4 important methods of Qualitative forecasting techniques
These techniques are primarily based upon judgment and intuition and especially when sufficient information and data is not available so that complex quantitative techniques cannot be used. The widely used qualitative methods are:
(a) Jury of executive opinion:
This is a method by which the relevant opinions of experts are taken, combined and averaged. These opinions could be taken on an individual basis or there could be a brain storming group session in which all members participate in generating new ideas that can later be evaluated for their feasibility and profitability.
(b) Opinions of the sales person:
The sales people being closer to consumers can estimate future sales in their own territories, more accurately. Based on these and the opinions of sales managers, reasonable trends of the future sales can be calculated. These forecasts are good for short range planning since sales people are not sufficiently sophisticated to predict long-term trends.
(c) Consumers’ expectations:
This method involves a survey of the customers as to their future needs. This method is especially useful where the industry serves a limited market. Based on the future needs of the customers a general overall forecast for the demand can be made.
(d) The Delphi method:
The Delphi method originally developed by Rank Corporation in 1969 for forecasting military events, has become a useful tool in other areas also. It is basically a more formal version of the jury of opinion method.
A panel of experts is given a situation and asked to make initial predictions, on the basis of a prescribed questionnaire, these experts develop written opinions. These responses are analyzed and summarized and submitted back to the panel for further considerations. All these responses are anonymous so that no member is influenced by others opinions. This process is repeated until a consensus is obtained.