Demand forecasting in a business based on experts’ opinions – an application of weibull distributions

Demand forecasts in a business may be constructed by various methods, e.g. by using Type-I formal models, or by using type-II formal models based on experts’ opinions. The experts can be the business’s managers or persons from outside of the studied business. The experts can not only construct forecasts, but also subjectively specify the probability of them coming true. In this article, the Weibull distribution is described, a distribution that may be applied in the process of constructing product demand forecasts for a business. The methodology for constructing a point forecast is explained, along with the methods for evaluating the chances of the forecast coming true and the methods for judging the probability connected with sales profitability.