TRL3709
ASSIGNMENT 6
SEMESTER 2
2022
Question 1
1.1 Load shedding has become a significant challenge to many South African
households, businesses and other entities. The four types of forecasting
, techniques, Eskom can use to forecast electricity (Megawatts) demand so
they may work toward providing an uninterrupted supply of power.
Eskom may use Qualitative forecasting methods. According to Chopra &
Meindl (2015:191). Qualitative forecasting methods are primarily subjective
and rely on human judgment. They are most appropriate when little historical
data are available or when experts have market intelligence that may affect
the forecast. Such methods may also be necessary to forecast Eskom
demand several years into the future in a new industry.
The second method is time series. Time-series forecasting methods use
historical demand to make a forecast. They are based on the assumption that
past demand history is a good indicator of future demand. These methods are
most appropriate when the basic demand pattern does not vary significantly
from one year to the next. These are the simplest methods to implement and
can serve as a good starting point for a demand forecast.(Chopra and Meindl,
2015: 192)
Eskom may also use Causal forecasting. Causal forecasting methods assume
that the demand forecast is highly correlated with certain factors in the
environment (the state of the economy, interest rates, etc.). Causal
forecasting methods find this correlation between demand and environmental
factors and use estimates of what environmental factors will be to forecast
future demand. For example, product pricing is strongly correlated with
demand. Eskom can thus use causal methods to determine the impact of
price promotions on demand.
Eskom may also use Simulation forecasting. Simulation forecasting methods
imitate the consumer choices that giverise to demand to arrive at a forecast.
Using simulation, a firm can combine time-series and causal methods to
answer such questions as: What will be the impact of a price promotion?
What will be the impact of a competitor opening a store nearby? Airlines
simulate customer buying behavior to forecast demand for higher-fare seats
when no seats are available at lower fares.
ASSIGNMENT 6
SEMESTER 2
2022
Question 1
1.1 Load shedding has become a significant challenge to many South African
households, businesses and other entities. The four types of forecasting
, techniques, Eskom can use to forecast electricity (Megawatts) demand so
they may work toward providing an uninterrupted supply of power.
Eskom may use Qualitative forecasting methods. According to Chopra &
Meindl (2015:191). Qualitative forecasting methods are primarily subjective
and rely on human judgment. They are most appropriate when little historical
data are available or when experts have market intelligence that may affect
the forecast. Such methods may also be necessary to forecast Eskom
demand several years into the future in a new industry.
The second method is time series. Time-series forecasting methods use
historical demand to make a forecast. They are based on the assumption that
past demand history is a good indicator of future demand. These methods are
most appropriate when the basic demand pattern does not vary significantly
from one year to the next. These are the simplest methods to implement and
can serve as a good starting point for a demand forecast.(Chopra and Meindl,
2015: 192)
Eskom may also use Causal forecasting. Causal forecasting methods assume
that the demand forecast is highly correlated with certain factors in the
environment (the state of the economy, interest rates, etc.). Causal
forecasting methods find this correlation between demand and environmental
factors and use estimates of what environmental factors will be to forecast
future demand. For example, product pricing is strongly correlated with
demand. Eskom can thus use causal methods to determine the impact of
price promotions on demand.
Eskom may also use Simulation forecasting. Simulation forecasting methods
imitate the consumer choices that giverise to demand to arrive at a forecast.
Using simulation, a firm can combine time-series and causal methods to
answer such questions as: What will be the impact of a price promotion?
What will be the impact of a competitor opening a store nearby? Airlines
simulate customer buying behavior to forecast demand for higher-fare seats
when no seats are available at lower fares.
