Forecasting Methods

Forecasting involves examining the actual project performance data to date and making predictions about future project performance based on this data. According to the PMBOK® Guide, forecasting methods fall into four different categories and each category has several types of forecasting methods. We'll look at a brief description of each of the categories next. The methods listed within these categories are beyond the scope of this book to describe.

Time series methods This forecasting method uses historical data to predict future performance. Earned value, moving average, extrapolation, trend estimation, linear prediction, and growth curve are some of the methods the PMBOK® Guide states fall into this category. We'll cover earned value in Chapter 11.

Causal/econometric methods Causal methods are based on the ability to identify variables that may cause or influence the forecast. A drop in interest rates, for example, may spur an increase in home sales. The methods included in this category are regression analysis, autoregressive moving average (ARMA), and econometrics.

Judgmental methods If your mom is anything like mine, judging others was an activity we were forbidden to participate in. This category of forecasting does just that, only it doesn't judge people. It uses opinions, intuitive judgments, and probability estimates to determine possible future results. Methods within this category include composite forecasts, the Delphi method, surveys, technology forecasting, scenario building, and forecast by analogy.

Other methods Other types of forecasting methods include simulation (like Monte Carlo analysis), probabilistic forecasting, and ensemble forecasting.

Project Management Made Easy

Project Management Made Easy

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.

Get My Free Ebook

Post a comment