Which forecasting method uses previous periods' data to identify trends and seasonality?

• A. Time Series analysis.
• B. Regression analysis.
• C. Qualitative forecasting.
• D. Scenario planning.

Answer: (A)

Time series analysis is the correct method to use when forecasting based on previous periods' data to identify trends and seasonality. This approach involves collecting data points over a series of time intervals and analyzing them to help predict future values. By doing so, it can reveal patterns over time, such as consistent increases or decreases in data values, as well as seasonal fluctuations that can affect the data during specific periods. This systematic approach allows businesses to make informed predictions about future demand, sales, or other metrics based on historical performance.

The other methods mentioned serve different purposes. Regression analysis involves examining the relationship between a dependent variable and one or more independent variables, rather than solely relying on historical data trends. Qualitative forecasting depends on expert judgment or market research, rather than numerical data derived from time intervals. Scenario planning focuses on developing strategic plans based on different future scenarios rather than predicting specific outcomes based on past data trends.