Distinguish between the following types of forecasts:c. Causal versus naive
Distinguish between the following types of forecasts:
c. Causal versus naive
Forecasting is the process of identifying the demand accurately for future production planning and decision-making purposes. It is an important area of manufacturing organizations as forecasting plays a vital role in the efficiency of the organization.
It is the method of forecasting that operates and the premise that a variable to forecast will have a cause-effect relationship with one or more than one independent variable. This is the forecasting method that takes into consideration all the possible factors that can impact a dependent variable. The data for causal forecasting can range from internal sales data to the external data recorded from surveys, indicators, social chatter, and so on.
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