Forecasting Techniques: High-Low Methods

 

Forecasting using historical data

A technique that is used to determine future trends with the help of historical data. In simple words, Forecasting is a prediction of trends in an upcoming period, that is used by businesses for planning and budgeting future expenses. Forecasts might include weekly data, monthly data, or yearly data according to required control and reporting. Forecasting is needed to determine the volume of production and sales, sales revenue, and costs.

Assumptions are made for forecasting for example a business use a 10% growth assumption in its sales revenue and sales volume and plan its future expenses and budget according to that prediction. Budgets can be prepared by topping up the amounts of the previous year with the assumed inflation rate and preparing an incremental budget.

Various methods and techniques are used for forecasting but we are discussing here the most reliable three methods used for the forecast.

           

High Low Method:

In this method, Semi-variable cost needs to break into variable cost and fixed cost to calculate the expected cost. The highest activity and lowest activity are selected from the data and their relevant costs are used to find out the variable cost per unit.

  VC/unit = increase in cost /increase in activity 

= highest cost - lowest cost/ highest activity- lowest activity  

 

To find out the variable cost, select the Highest or lowest output and multiply it by the Variable cost per unit.  

In this way, the variable cost component of a semi-variable cost is found 

Total cost = Fixed cost + variable cost 

So, Fixed cost = Total cost – variable cost.

 

Illustration

 

ABC limited has the following output and cost data for the last 4 years

 

 

Year	Output units	($ )Total cost
1	5,000	15,000
2	8,000	25,000
3	11,000	30,000
4	15,000	35,000

 

 

Calculate the expected costs in year 5, when the output is 18,000 units assuming zero inflation.

 

Answer

 

First, we will find out the variable factor in the Total cost using the Variable cost formula of the High-low method.

 

 

Finish What you Start in your New year Resolution 2023

  

                          Finish What you Start in your New Year Resolution 2023

The horror days of life are when we start calculations about our quality time. We feel ourselves incomplete, careless and worthless due to wastage of our time. We indulge in self-blaming for being bad managers of ourselves when we deviate from our objective and sometime get confuse about our objectives.

Scrolling social media, searching online earning methods, watching short stories and reels, what’s app chatting and thinking about what should do and what should not to do make the days rubbish.

Enough is enough! Mark a full stop! And now its time for a new year resolution 2023 in which objectives should be strengthen like a mountain and Each and every activity should be tied up with your objective. Mark the words that you will say throughout the next year, must consist of “accomplished” or “completed”:

Following guidelines can help us to take out from energy consumer pool of our half-done tasks:

1) List down all your incomplete projects and number them according to your priority and your desires.

2) Ask yourself about how will you do your first task. And how many tasks should be eliminated to achieve the first one.

3) Make a space and time for your priorities is an important factor. Throw away unnecessary projects to save your energy for the most important one. The most important one can be defined as the project that will give you the sense of achievement and completion.

4) Believe it will happen if you plan well.

5) Please be focused if you have once decided to do it after analysis.

6) Combat with negative thoughts include “ it can not happen”, It is not possible etc.

7) Write down your objectives whether it is related to buy a property or related to buy a baby toy

8) Always choose alternatives for the ways through which an objective can be achieved, analyze and go for the least risky alternative.

9) Look for consequences for your objectives and always analyze what will happen after achieving this objective. How would your manage afterward consequences of your objectives? It means how will you save your bought property, How will you deal with your family and friend after marrying a girl your love, and How will you handle the black sheep envy from your position.

10) Execute, implement and do it. Be brave, trust your self and go for it. Discipline yourself, make space in your daily routine to climb the steps towards your objective, and accomplish it as soon as possible.

Good things happen to those who hustle and rush after planning and analysis. Don’t waste time overthinking. Endeavors are in your hand while miracles and success come from the Almighty. Pat your back for your endeavors.

Good Luck! 

Digital Skills

       

                            Digital Skills

 Career Development Center for the Future (CDSF) is a program that helps train individuals to succeed in careers where technology can make a difference. CDSF works with various industry partners such as Fortune 500 companies, and small businesses across all states. The training and support provided by CDSF allows its graduates to work right out of college, ready to start their career. Read more about our certification programs here!

Certificate Program Designations

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Digital Marketing Specialist/Marketing Analyst

The role of a digital marketing specialist, or “marketing analyst”, is to provide insights into customer behavior and consumer buying process. They help organizations understand what their target markets want, the best ways to reach these audiences, and which channels are most effective for each group, along with how to identify and implement effective promotion campaigns. Students learn how to identify and solve problems related to digital marketing, including understanding competitive threats, defining relevant KPIs for individual projects, tracking and reporting on campaign results, and using appropriate software tools to achieve targeted goals. Learners also gain insight into how businesses can be prepared for changes in consumer behavior through strategic planning. This module teaches students how they can apply problem-solving skills to solve problems and make decisions that will lead to improved organizational effectiveness in the face of competition. It also provides valuable exposure to real companies. For additional information about this program, check out this article.

Digital Business Analyst

Digital business analysts provide technical solutions for computer systems, networks, and applications that improve organizational efficiency. These professionals have expertise in IT infrastructure and information technologies. They use analytical and computational methods to find patterns in the large amounts of data available within business environments. In addition, they study the effects of different types of processes on both business and financial outcomes. Additionally, they design system requirements and designs, evaluate user needs and preferences, and collaborate with other employees to develop new business models. Students learn how to write reports in Microsoft Excel to present findings in an organized manner, perform basic statistical analysis, identify opportunities for optimization, and provide project proposals to top management. To complete this module, students need to complete a general IT and communication course and at least one elective subject from this class. Learn more here!

Digital Advertising Strategist

Digital advertising strategists help brands define their long-term goals and select specific tactics appropriate for their company’s unique situation. A digital advertisement strategist uses creativity to drive targeted messages to every person who interacts with the organization’s website, mobile app, or other online channels. Also known as "digital advertising specialists," digital advertising strategists use statistics and analytics to optimize ad placements on their clients' websites, apps, and other online products. With the rise of e-commerce, digital advertising strategist creates ads based on customers' browsing history, personalization, and competitor analysis. Students learn how to plan and develop creative advertising plans, as well as evaluate existing campaigns and assess market trends. Also included within the learning materials are several case studies to help students better understand and prepare for the job. Learning resources include PowerPoint presentations that explain key ideas and concepts, examples, practice questions, and interactive lesson plans. Get started today and make a positive impact in your area!

Digital Experience Designer/UX Designer

Digital experience designers work seamlessly with people, not computers. An ideal candidate should be skilled in interaction design, visual design, graphic design, print design, audio design, layout design, accessibility, and video production. Although these professionals work independently of users, they coordinate with them to determine the best way to deliver the message. For example, UX designers may produce wireframing that shows exactly what the end result will look like or work alongside developers to fine-tune the development program itself. One thing an UX designer needs to master, however, is interpersonal skills. This profession requires quick thinking and being able to listen to others when communicating about the goal. What separates a good experience designer from great ones? Good design skills, teamwork, empathy, and understanding the audience. To further build skill sets for those who wish to pursue the field of UX, students go through courses in Adobe Photoshop CSD, Accessibility Design, User Experience Institute’s Web Content & Technology Design Course, and Adobe Illustrator Academy. Take advantage of professional and free classes on sites like Udemy!

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