Chapter 2.4, Problem 5P

a.

Summary Introduction

To explain:The difference between aggregate forecast and single item forecast.

Introduction: The aggregate forecastand single item forecast are types of subjective method of forecasting. The former discusses the capability demands of a company the quantity of item that it wants to generate and its productionpolicies in the future for the period of 2 to 12 months. The later analyzes previous revenuesby using 12 forecastingtechniques to calculate predictions of a single item.

b.

Summary Introduction

To explain:The difference between short-term forecast and long-term forecast.

Introduction: The short-term forecasting process is used in the periods within a year with a normal range of 1-3 months. The long-term forecasting is the method of analyzing and assessingtrends that can be recognized through scanning a range of data sources with periods of almost two-years.

c.

Summary Introduction

To explain:The difference between casual forecast and naive forecast.

Introduction: Naive forecasting is the estimation method in which theactual of the last period are used as the prediction for this period, without any adjustment or attempt to determine causal  variables. It is only used to compare the predictions produced by superior or advanced methods.

Casual forecasting is the technique of assessment relying on the premise that the dependent variable has a connection of cause and effect with independent variables.