Key Concept Explanation

Forecasting is defined as actively predicting a future event or condition, Many forecasting decision or methods or informal such as a gut feeling or intuition, recent experiences, rule of thumb, advice from a friend or friends, or a combination but some use models and math mathematical methods. Since forecasting informal methods can be highly subjective, those utilized by government or business need to be more formal as informal approaches may problematic and untainted. More systematic methods are often employed as business and government forecasting approaches need to be made in the interest of the public, community or business (McCalman, 2012) This topic was chosen for academic as well professional interest as correct and accurate forecasting can serve as great cost saving methods or revenue generator for an organization.

Article Review & Comparison

McCalman defines forecasting as the prediction of future events comparing both informal and formal methods both in business and government. The most informal method or formalization discussed by McCalman is forecasting based on most recent observation. Systematic forecasting existing at the opposite extreme uses data and mathematical methods used largely or restricted forty years ago to experts with large computing power. As time has progressed the systematic methods not only utilized technology and data but statistical information and statistical software programs, which has opened forecasting up to those without degrees in statistics or economics (McCalman, 2012, pg. 42)

McCalman systematic methods as univariant or Box-Jenkins - high historical coherence and low conceptual coherence, calibration technique – energy end use, and econometric modeling – blend of theory and empirical observation
The Box-Jenkins methods is noted as very good at replicating historical