Forecasting Basics: Qualitative Approach

Not always you as a Demand Planner have luxury of sitting on top of good amount of historical data for predicting demand of various products. For new products being introduced into the market and other scenarios when data available isn't sufficient, then one needs to utilize their judgement and intuition. This can be best addressed by using collective expert opinions in making forecasts and the process is called "Qualitative method" in forecasting. 

"Qualitative Techniques"Definition: "Estimating method that relies on expert human judgment combined with a rating scale, instead of on hard (measurable and verifiable) data."

Few known methods used are:

1. Expert Inputs

Sales, Marketing and Management folks bring expertise opinion towards making accurate forecast predictions. Even with quantitative forecast in place, Expert inputs can modify and adjust forecast numbers to improve it's accuracy. 

2. Delphi method

Experts anonymously answer a questionnaire, which is later revisited to review the responses. The process provides flexibility of revising their earlier answers based on the feed backs. This process leads to answers converging on every round and every time improving the accuracy. 

3. Analogy/Attribute/Assumption based Forecasting

Forecast based on analogy to similar products. 

4. Market Research

Creating forecast based on market &  sales analysis along with Consumer research on   products.

More reading material @

1. Forecasting Techniques, Part 2: Qualitative Methods

http://www.clickz.com/3623077

2. Measuring Forecast Accuracy : A Tutorial :  Qualitative Methods

 http://scm.ncsu.edu/public/forecasting/8qualitative.html