1. Time-series methods use historical data to develop forecasts of the future.a. The underlying assumption is that patterns exist and that the future will resemble thepast.b. Time-series methods do not in themselves predict the impact of present or futureactions that managers might take to bring about change.c. A trend reflects a long-range general movement that is either upward or downwarddirection.d. A seasonal pattern indicates upward or downward changes that coincide withparticular points within a given year.e. A cyclical pattern involves changes at particular points in time that span longer than ayear.f. Time-series are more valuable for predicting broad environmental factors than inpredicting the impact of present or future actions.g. Because time-series rely on past trends, there can be danger in their use ifEnvironmental changes are disregarded.2. Explanatory or causal models attempt to identify the major variables that are related to orhave caused particular past conditions and then use current measures of those variables(predictors) to predict future conditions.a. Explanatory models allow managers to assess the probable impact of changes in thepredictors.b. Regression models are equations that express the fluctuations in the variable beingforecasted in terms of fluctuations among one or more other variables.c. Econometric models are systems of simultaneous multiple regression equationsinvolving several predictor variables used to identify and measure relationships orinterrelationships that exist in the economy.d. Leading indicators are variables that tend to correlate with the phenomenon ofmajor interest but also tends to occur in advance of the phenomenon.B. Technological, or Qualitative, Forecasting is aimed primarily at predicting long-term trends intechnology and other important aspects of the environment The focus is upon longer-term issuesthat are less amenable to numerical analysis than quantitative approaches.The Delphi method and scenario analysis can be used as techniques.C. Judgmental Forecasting relies mainly on individual judgments or committee agreementsregarding future conditions.1. Judgmental forecasting methods are highly susceptible to bias.2. The jury of executive opinion is one of the two judgmental forecasting models. It is a means offorecasting, in which organization executives hold a meeting and estimate, as a group, a forecastfor a particular item.