Forecasting is a process of making predictions
about the future course of a business or a
company based on trend analysis and past and
present data
Also the use of
scientific
techniques and
methods
Features / characteristics
Forecasting is strictly concerned with future events only
It analysis the probability of a future event or
transaction occurring or happening
It involves analysis of data from the past and the present
Forecasting uses scientific techniques and
methods to make such forecasts
But it also involves certain guesswork and observations
Uses of Foprecasts
Accounting
Cost / profit estimates
Finance
Cash flow and funding
Human Resources
Hiring / recruiting / training
Marketing
Pricing, promotions, strategy
MIS
IT / IS systems, services
Operations
Schedules, MRP, workloads
The basic steps in a forecasting task
Step 1: Determine purpose of forecasts
Step 2: Establish a time horizont
Step 3: Select a forecasting technique
Step 5: Prepare the forecast
Step 6: Monitor the forecast
Forecasting Methods
Qualitative
These methods are not purely guesswork—there are
well-developed structured approaches to obtaining
good forecasts without using historical data.
Delphi technique
Sales force polling
Executive opinions
Consumer surveys
Quantitive
can be applied when two conditions are
satisfied: numerical information about the past
is available; it is reasonable to assume that some
aspects of the past patterns will continue into
the future.