Question

Describe these forecasting techniques and discuss the pros/cons of each

1. Expert Opinion

2. Opinion Polls and market research

3. Survey of spending plans

4. Economic Indicators

5. Projections

6. Econometric models

Answer 1

Expert opinion is based on an expert’s forecasts the market situations for any product based on his experience. An expert who has an experience of a fairly long period of time can make a better prediction. The opinion is based on the market situations, product review and customer preferences.

Pros:

This is a simple method and does not require any broad statistical analysis. It is also the fastest method to forecast about the market situations.

Cons:

Experts may have a long experience but they cannot be 100% sure about the market of any good. Experts forecasted that the price of Houses will not fall in the U.S. but there was a Great Recession we experienced. So, there is not any surety that the forecast will be 100% accurate. Experts can also have their personal bias, therefore, the prediction cannot be reliable.