Executive Summary

Forecasting is a method use by managers to develop meaningful plans

and helps to predict information to the operating systems as well as the financial
and marketing part of the business. It helps managers to match supply with the
demand.
There are 2 approaches to forecasting, namely; Qualitative and
Quantitative. Qualitative technique consist of subjective inputs and Quantitative
uses historical data and analyzing it objectively.
The common features of these 2 is that forecasts have the same
underlying, they are rarely perfect, group forecasts are more accurate and
accuracy decreases as time goes on.
There are six elements to a good forecast. Namely: Timely, Accurate,
Reliable, Has a meaningful unit, it should be in writing, and is easy to understand
and use.
In forecasting there are 6 steps. The first one is to determine the purpose
of the forecast. What are needed in the forecast and how one will do it. The next
one is to establish a time horizon, or the time limit of the forecast. The third step
is to select a forecasting technique. What is the most suitable forecasting
technique for the research. The fourth step is to gather and analyse relevant
data. These pertain to past data, if any, and the present data. The fifth one is to
prepare the forecast and the last one is to monitor the forecast.

There are 3 types of forecasting. The first one is forecast based on

Judgement and Opinion. This kind of forecast rely on analysis of subjective
inputs given by experts, by consumer data or by managers and their staff. The
second type is forecast based on a time-series data. This kind of forecast rely on
sequential observations at a regular interval. Observing the changes over time of
the data such as demand and productivity output. The last type is the associative
forecasting technique. This type of forecasting rely on the identification of related
variables to predict future values.

Table of Contents
Title

Page Number

Forecasting

Common Features of Forecasting

Elements of a Good Forecast

Steps in Forecasting Process

Approaches to Forecasting

Forecast Based on Judgement and Opinion

Forecast Based on Time Series Data

Associative Forecasting Technique

10

Accuracy and Control Forecast

11

Using Forecast Information

17

Bibliography

18