Forecasting

Forecasting (Definition)

Forecasting is the process of making predictions of the future based on past and present data.

Key aspects of forecasting include:

1. Used in various areas of business, including sales, finance, and operations
2. Can be short-term, medium-term, or long-term
3. Involves both quantitative methods (using historical data) and qualitative methods (using expert opinions)
4. Essential for budgeting, resource allocation, and strategic planning
5. Helps in identifying potential opportunities and risks
6. Accuracy can vary and typically decreases for longer-term forecasts
7. Regular review and adjustment of forecasts is important for their effectiveness

Effective forecasting is crucial for informed decision-making and strategic planning in business.