--- title: "Qualitative forecasting techniques" subject: "Industrial Engineering and Management" chapter: 6 key: "semester_6/industrial_engineering_and_management:qualitative-forecasting-techniques" source: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/qualitative-forecasting-techniques site: BCT Engineering --- # Qualitative forecasting techniques Industrial Engineering and Management · Chapter 6: Forecasting - Asked in: year not given, 5 marks - Video: [Forecasting 3: Qualitative methods](https://www.youtube.com/watch?v=UIn2FUwuOfk) — Adapala Academy - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/qualitative-forecasting-techniques - Whole chapter: https://www.bctengineer.com/md/semester_6/industrial_engineering_and_management/chapter-6 ## Question What is forecasting? Why is it needed in production management? Explain the qualitative forecasting techniques. ## Short answer Forecasting is estimating future demand using past data and judgment, essential for production, capacity, and inventory planning. Qualitative techniques—executive opinion, Delphi method, sales force composite, market survey, and historical analogy—are used when data is scarce, relying on expert opinion. ## Answer **Forecasting** is the estimation of future demand or other variables from past data and judgement. Production and inventory plans, capacity, purchasing and manpower all depend on it. A forecast is never exact, so it should be given with an error estimate, and forecasts for groups of products are more accurate than for single items. #### Qualitative (judgemental) techniques They are used when past data are scarce or unreliable, for example for a new product. 1. **Executive (jury) opinion:** senior managers from marketing, production and finance give their estimates, which are averaged or discussed. Quick and cheap, but may be dominated by a strong personality. 2. **Delphi method:** a panel of experts answers questionnaires anonymously in several rounds; after each round the summary is circulated and experts revise their views until agreement. It avoids group pressure but is slow. 3. **Sales force composite:** each salesperson estimates sales in their territory; the estimates are added up and adjusted. Uses close customer knowledge but may be biased. 4. **Market survey (customer opinion):** questionnaires, interviews or test marketing to find buying intentions. Good for new products but costly and may not reflect actual buying. 5. **Historical analogy:** the demand of a similar earlier product is used. #### Qualitative versus quantitative Qualitative methods depend on opinion and experience, are subjective, and suit new products and long-term technology forecasts. Quantitative methods use numbers from the past (time series or causal models) and suit existing products with stable patterns. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. When are qualitative forecasting techniques preferred? A. When much reliable past data exist B. When past data are scarce, e.g. a new product C. When demand is perfectly stable D. Only for short-term forecasts of old products Answer: B. Judgemental methods are used when numerical history is scarce or unreliable. (Key point: When qualitative) 2. What is the key feature of the Delphi method? A. Salespeople add up territory estimates B. Customers are surveyed by test marketing C. A panel of senior managers meets and argues openly D. Experts answer questionnaires anonymously in several rounds, revising after summaries Answer: D. Anonymity avoids group pressure; the process is slow because of repeated rounds. (Key point: Delphi method) 3. What is a likely weakness of the sales force composite method? A. Estimates may be biased B. It ignores customer knowledge C. It needs no data from anybody D. It cannot be added up Answer: A. Salespeople know their customers well, but their estimates may be biased. (Key point: Sales force composite) 4. Which statement about forecasts is correct? A. A good forecast is exact B. Forecasts for single items are more accurate than for groups C. A forecast should be given with an error estimate; group forecasts are more accurate D. Forecasts are not needed in production management Answer: C. Forecasts are never exact; aggregation reduces error. (Key point: Forecast nature) ## Related in Industrial Engineering and Management - [System concept and production system model](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Asystem-concept-production-system) — Industrial Engineering and Management, chapter 1 - [Forecasting by moving average and smoothing](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Amoving-average-and-exponential-smoothing) — Industrial Engineering and Management, chapter 6 ## Related in other subjects - [Risk management; qualitative, quantitative; steps](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-management-qual-quant-steps) — Project Engineering, chapter 5 - [Load management techniques](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_power_distribution_and_illumination%3Aload-management-techniques) — Industrial Power Distribution and Illumination, chapter 10, asked 2× - [Solid waste management system and techniques](https://www.bctengineer.com/question.md?key=semester_7%2Fenvironment_and_pollution_control%3Asolid-waste-management-techniques) — Environment and Pollution Control, chapter 5 - [Manage risk; qualitative and quantitative system](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-manage-qualitative-quantitative) — Project Engineering, chapter 5