INDUSTRY FORECASTING

Industry Forecasting

Industry Forecasting

Introduction

Forecast in simple terms is a prediction thru a statement or claim that a particular event will occur in the future. It looks like to me that almost the majority of the people, including children, once in their life time were a forecasters, as sometimes in their past they tried to predict any future event. This act of making such prediction is therefore, called forecasting(Mullins, Walker, Boyd 2010).

Discussion

Forecast has to be well thought and planned so it can be called good or adequate forecasting. In order to prepare a forecast, one should first identify the assumptions in the forecast model one intent to use. Then gather and analyze relevant data. After that, forecast and finally, monitor the results to whether or not the trend has weakened, strengthened, or if there is any factors that have gone unchanged. Forecast should be timely, accurate, reliable, and the technique should be simple to understand and yet, cost-effective (Mullins, Walker, Boyd 2010).

Obtaining a reliable and accurate forecasting of future sales or market behavior is of paramount importance for business people such as policy makers, companies making investment decisions, setting up prices and so on. There are several forecasting methods and they are differently used by different companies to satisfy each one specific needs. Forecasting models companies use depend mainly of factors such as accuracy required, time horizon, availability of data and competent personnel(Mullins, Walker, Boyd 2010)..

Every organization needs forecasts for better business operations, and they should be produced by a group of forecasters, not individually. In general, the decision-makers use forecasting models to assist them in their decision-making process. The figure bellow depicts the model overview of business forecasting techniques.

With forecast being an uncertain process of prediction of what will occur in the future, then, because of this uncertainty, the accuracy ...