# 10.4.2 The Delphi Method

### Intended learning outcomes: Explain the Delphi forecasting method as a series of successive surveys that increase consensus.

In the Delphi method forecast (the name refers to the oracle at Delphi in antiquity), “expert opinion” is gathered through several structured anonymous rounds of written interviews.

The method generally proceeds in various iterations. Figure 10.4.2.1 shows the desired progression during the successive rounds of questioning.

Fig. 10.4.2.1      Delphi forecasting method: increasing consensus.

The mean of the answers shifts in a specific direction. At the same time, when the dispersion of the answers narrows, there is an increase in the consensus about the direction taken. To arrive at this result, a single iteration should include the following steps:

• The questionnaire is meaningfully constructed or altered. The questionnaires are distributed and completed once again.
• The answers are statistically evaluated by determining mean and dispersion. The results of the evaluation are sent to the experts.
• All the experts are asked to defend their views against extreme arguments. Those who change their opinion as a result of this procedure must provide justifications. The “extreme” respondents must either support their theses with arguments or abandon them.

As for all surveys, the problem for the Deplphi method also lies in formulating the right questions, quantifying the answers, and identifying extreme responses.

The experts are chosen from various areas of an organization, including the sales and marketing units. They are selected for their competence in the field and their broad vision, not for their hierarchical position within the company. The composition of the group should remain anonymous so that the experts cannot identify and be influenced by the responses of other individuals.

## Course section 10.4: Subsections and their intended learning outcomes

• ##### 10.4 Future-Oriented Techniques

Intended learning outcomes: Explain the trend extrapolation forecast and the Delphi method. Describe scenario forecasts.

• ##### 10.4.1 Trend Extrapolation Forecast

Intended learning outcomes: Identify base demand B0(k) for period k>0 known at time t=0. Explain the calculation of the quotient “actual demand in period t+k” divided by “base demand known for period t+k at the end of period t”, k>1. Describe smoothing of quotient means for extrapolation leading to extrapolated forecast values for forecast distance k.

• ##### 10.4.2 The Delphi Method

Intended learning outcomes: Explain the Delphi forecasting method as a series of successive surveys that increase consensus.

• ##### 10.4.3 Scenario Forecasts and Scenario Planning

Intended learning outcomes: Describe scenario forecasts and scenario planning along a time axis. Present the procedure for scenario planning.