Forecasting is the process of predicting future project performance trends based on the actual performance to date. Forecasting methods may be classified in different categories:
• Time series methods. Time series methods use historical data as the basis for estimating future outcomes. Examples of methods in this category may include earned value, moving average, extrapolation, linear prediction, trend estimation and growth curve.
• Causal/econometric methods. Some forecasting methods use the assumption that it is possible to identify the underlying factors that might influence the variable that is being forecasted. For example, sales of umbrellas might be associated with weather conditions. If the causes are understood, projections of the influencing variables can be made and used in the forecast. Examples of methods in this category include regression analysis using linear regression or non-linear regression, autoregressive moving average (ARMA) and econometrics.
• Judgmental methods. Judgmental forecasting methods incorporate intuitive judgments, opinions and probability estimates. Examples of methods in this category are composite forecasts, surveys, Delphi method, scenario building, technology forecasting, and forecast by analogy.
• Other methods. Other methods may include simulation, prediction market, probabilistic forecasting, and ensemble forecasting.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.