A Simple Approach to Forecasting (Una Aproximación a Los Métodos De Pronóstico)

This is a course material from the book Managerial Decision Making Under Risk and Uncertainty. The book is originally in Spanish and is untitled as Decisiones empresariales bajo riesgo e incertidumbre. The level of the book is basic. We use very few mathematics and it is expected to be used by managers. In this fourth chapter we deal with the forecasting methods. We use a very simple example to explain the decomposition method. In this method we separate diiferent components in order to make the forecast. We identify using an actual series the trend, the seasonality, cycle and error. Finally, we compare the forecasting with this method with simple regression and moving average. We also include the Delphi Method as a tool to convey consensus for better decisions.