Apart from decision making the second important function of business economics is forward planning.f.p.

means preparing plans for future.once decision is made about a particular goal to be achieved, plans regarding production,pricing,cost,structure,capital budgeting etc are prepared.f.p gors hand in hand with the decision making so we can say f.p. is necessary for smooth functioning of the firm. It should be noted here that f.p. is a highly complicated task. It demands much more carefulness than operational issues.it requires adequate knowledge about future pattern of consumer brhaviour,movements in the input, markets and general economic trends and environment in the country. Any decision taken by a firm affects its future as there are certain decision taken today implement today but its effect will be seen in future. Eg. Decision to increase advertisement expenditure today,implemented today but will not increase in demand today but its effect on demand will be seen in future. Similarly there are certain decision taken today but implemented in future. Eg. Decision to increase total volume of sales by 10% may be taken today but will be implemented next year. Manager is more interested in future of the firm because present state of firm is already decided and known, a manager has to show his ability and skill in framing future set up of the firm.thus plans made by manager for all round development of a firm is known as forward planning. f.p. is of two types. Short term forward planning: planning done for near future. Long term forward planning: planning done for distant future. Forward planning is full of uncrtainities as it is done for future and future is uncertain.it cannot be said with any degree of certainity that plans for future will be successful as no manager can claim to possess prefect knowledge and information about future.thus in modern times in order to reduce the element of uncertainity and make forward planning as accurate as possible economic models, and mathematical and statistical tools are widely used. Thus we can say that a manaeraial economicst has to play a key role in decision making process and forward planning of a firm.he must be fully aware of his responsibilities and obligations so that he can discharge his role in a most successful manner.