Page 146 - Data Science class 11
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Standard Questions (Section B)
A. Short answer type questions:
1. What is Forecasting?
Ans. Forecasting is an approach that takes data and predicts the future value of the data, looking at its distinctive trends.
2. Which are the two types of forecasting? Explain.
Ans. The two main forecasting approaches are:
• Qualitative: This method is based on expert or skilful opinions and comprehensive analytical research of
consumers’ behaviour.
• Quantitative: This method is based on historical statistics research.
3. Write the basic steps in forecasting process.
Ans. The forecasting process involves the following five forecasting process. They are:
• Step 1: Problem definition
• Step 2: Gathering information
• Step 3: Preliminary exploratory analysis
• Step 4: Choosing and fitting models
• Step 5: Using and evaluating a forecasting model
4. Name at least 4 situations when to use observational data.
Ans. The four situations are:
• While collecting sensitive information, when you don’t trust your participants to be truthful with their self-reporting.
• When you need robust data to describe consumer habits.
• When you need to understand the how or what of a research question.
• When behaviour in a natural seeing is important to your research question.
5. Name the advantages of observational study.
Ans. The advantages of observational study are:
• Simplicity
• Perfection
• Good assessment of real-world applicability
• Economical
• It helps identify prospective customers for a business
• Helps study rare events
B. Long answer type questions:
1. What are the advantages and disadvantages of Forecasting?
Ans. The advantages of forecasting are:
• Gaining valuable insight
• Learning from past mistakes
• Decreasing the life cycle costs
• Establishing a new business
• Formulating plans
• Estimating financial needs
• Facilitating managerial decision
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