Jury of Executive Opinion
There are two steps in this method:
- High ranking executives estimate probable sales, and
- An average estimate is calculated.
The assumption is that the executives are well informed about the industry outlook and the company’s market position, capabilities, and marketing program. All should support their estimates with factual material and explain their rationales.
Companies using the jury of executive opinion method do so for one or more of four reasons:
- This is a quick and easy way to turn out a forecast.
- This is a way to pool the experience and judgment of well informed people.
- This may be the only feasible approach if the company is so young that it has not yet accumulated the experience to use other forecasting methods.
- This method may be used when adequate sales and market statistics are missing, or when these figures have not yet been put into the form required for more sophisticated forecasting methods.
The jury of executive opinion method has weakness.
- Its findings are based primarily on opinion, and factual evidence to support the forecast is often sketchy.
- This approach adds to the work load of key executives, requiring them to spend time that they would otherwise devote to their areas of main responsibility.
- And a forecast made by this method is difficult to break down into estimates of probable sales by products, by time intervals, by markets, by customers, and so on.
The Delphi Technique:
Several years ago researchers at the he Rand Corporation developed a technique for predicting the future that is called the Delphi technique. This is a version of the jury of executive opinion method in which those giving opinions are selected for their “expertise”. The panel of experts responds to a sequence of questionnaires in which the responses to one questionnaire are used to produce the next questionnaire. Thus, information available to some and not to other experts is disseminated to all, enabling all to base their final forecasts on “all available” information. Some contend that “this technique eliminates the bandwagon effect of majority opinion.”
