## Executive Summary

- What are forecasting methods?
- How the forecasting methods are used differently between consensus and statistical forecasting.

## Forecasting Methods Definition

A forecasting method is the category of forecasting which is being applied.

- Time series forecasting (such as exponential smoothing, and moving average)
- Consensus-based forecasting (the Delphi method, and prediction markets) are also methods.
- Causal forecasting is a method of forecasting where independent variables are selected in order to predict dependent variables.

Forecasting methods can be confused with a forecasting model, which is most often used to describe the specific mathematical formula used to develop a forecasting in either time series or causal forecasting. The model is differentiated from the forecasting parameters which then control the model in its development of the forecast.

## How is a Forecast Method Different from a Forecast Model?

Forecasting models are the specific or exact procedure that was used to create the forecast. A three-period moving average is a model while a two-period moving average is another model, both of which are within the time series forecasting method.

Forecasting models are subordinate to, or children of** parent forecasting methods.**

Forecasting models are strongly associated with statistical forecasting, and not consensus-based forecasting or collaborative forecasting.

## Search Our Other Forecasting Content

### Brightwork Forecast Explorer

## Reference

Forecast models and parameters for time series are covered in the following book.

### Forecasting Parameters Book

### Uses of Forecast Parameters

**unmatched**in the ability to cost effectively create enormous numbers of items, and the statistical forecast is often the first forecast which is created – although manual adjustments may follow.

### The Need to Understand Forecast Parameters

- Understand the different categories of forecast parameters.
- How different statistical forecasting applications work with forecast parameters (learn the difference between manually set and internally set forecast parameters and so-called best-fit forecasting)
- Learn how changes in forecast parameters create changes to the forecast produced.
- How to compare and contrast forecast parameters to understand better the forecast profiles which a company uses.

### Chapters

- Chapter 1: Introduction
- Chapter 2: Where Forecasting Fits within the Supply Chain Forecasting Footprint
- Chapter 3: The Common Problems with Statistical Forecasting
- Chapter 4: Forecast Parameters
- Chapter 5: Introduction to Best-Fit Forecasting
- Chapter 6: Conclusion