Quantitative forecasting methods in media management

1
Quantitative forecasting methods in media
management

• Prof. Dr. Algirdas Budrevicius
• Vilnius University, Faculty of Communication

Course website http//www.kf.vu.lt/albud/progn/E
rasmus/Greece_2005/index.htm
2

• Famous forecasting quotes
• --William Shakespeare
• "If you can look into the seeds of time, and say
  which grain will grow and which will not, speak
  then unto me. "

3

• "It is far better to foresee even without
  certainty than not to foresee at all. "
• --Henri Poincare in The Foundations of Science,
  page 129.

4
Forecasts in media management

• Forecasting methods may be used for planning
  decisions in various domains of media management
  (resource management, personnel management,
  finance management, organizational management).
  Media organizations and managers as well as other
  business, government agencies, non-profit
  organizations need timely forecasts.

5

• Managers need forecasts to plan decisions for
  various media, including newspapers, TV, books,
  magazines, internet. etc.
• Most examples for this course will be related to
  magazines. The following data on magazines will
  be analyzed forecasting of price of a single
  copy of magazine, of a subscription price for the
  next year forecasting of the number of magazines
  (titles) forecasting of the subscription or
  single copy sales of the magazines for the next
  year, etc.

6
Course materials

• Course description Website http//www.kf.vu.lt/a
  lbud/progn/Erasmus/Greece_2005/index.htm
• Demonstrations PowerPoint presentations
• Time-series data, forecasting examples (Excel
  workbooks), assignments

7
Readings

• 1. Spyros Makridakis, Steve Wheelwright and Rob
  J. Hyndman. Forecasting Methods and
  Applications  (3rd edition). 1998. New York. John
  Wiley Sons. http//www-personal.buseco.monash.ed
  u.au/hyndman/forecasting/

8

• 2. Spyros Makridakis, Steve Wheelwright.
  Forecasting Methods for Management (4th edition).
  1985. New York. John Wiley Sons.
• 3. Mohsen Attaran. MSIS - Management Science
  Information Systems. 1992. New York. John Wiley
  Sons.

9
Forecasting methods in general
10
During this course you will learn

• that basic quantitative forecasting technique is
  not too complicated to be used in their work,
• where and how to use the basic quantitative
  forecasting technique,
• how to prepare short and medium time range
  forecasts using the methods of trend analysis,
  how to determine errors of the forecasts,
• how to access and use simple forecasting tools
  included in the Excel program.

11
Current situation in forecasting

• Forecasting is widely used in management now
• There exist a well defined set of quantitative
  forecasting methods
• There exists computer software that may be quite
  simply applied in forecasting
• Excel program allows to solve simple forecasting
  tasks

12
Taxonomy of forecasting methods

• Methods quantitative and qualitative
• Qualitative judgmental (based on expert
  opinions) and technological (used for long term
  forecasting)
• Quantitative time series methods and reasoning
• Note only time series methods will be considered
  in this course.

13
Quantitative time-series based forecasting a
rationale
14
Time-series methods of forecasting

• Time-series analysis relies on historical data
  and attempts to project historical patterns into
  the future

15
Example of time-series data

• Number of newspaper copies sold (in th.)

16
Definition of a forecasting situation

• Data (time series, or historical data)
• Forecasting method (e.g. Moving average, Trend
  analysis)
• Forecast
• Accuracy of forecast

17
Basic steps in a forecasting task

• Defining the problem
• Choosing time-series data
• Analyzing visually data patterns
• Choosing a model
• Calculating a forecast
• Evaluating the forecasting accuracy

18
Example of data used in forecasting
19
Example of data
20
Example of forecasting
21
Forecast accuracy

• Forecast accuracy can be determined only when
  actual (future) data are available.
• Error of a forecast is measured as a difference
  between the actual and forecasted values

22
End