Forecasting / Predictive Analysis

Essential for construction and manipulating models because when a deciion in implemeneted, the results usually occur in the future.

Ecommerce has created an immense need for forecasting and an abundance of available information for performing it.

Many orgs have accurately predicted demand for products and services using a variety of quantitive and qualitive methods.

CRM and revenue management systems rely heavily on forecasting techniques / predictive analysis

Categories of models pg 140

Category: Optimisation of problems with few alternatives

• Process & Objective: Find the best solution from a small number of alternatives
• Representative Techniques: Decision Tables & Decision Trees

Category: Optimisation via algorithm

• Process & Objective: Find the best solution from a lareg number of alternatives, using a step by step improvement process.
• Representative Techniques: Linear and other mathematical programming models, network models.

Category: Optimisation via an analytical formula

• Process & Objective: Find the best solution in one step using a formula.
• Representative Techniques: Some inventory models.

Category: Simulation

• Process & Objective: Finding a good enough solution or the best among the alternatives checked using experimentation.
• Representative Techniques: Several types of simulation.

Category: Heuristics

• Process & Objective: Find a good enough solution using rules.
• Representative Techniques: Heuristic programming, expert systems.

Category: Predictive models

• Process & Objective: Predict the future for a given scenario.
• Representative Techniques: Forecasting models, Markov analysis

Category: Other models

• Process & Objective: Solve a what if case using a formula.
• Representative Techniques: Financial modeling, waiting lines.