Business Forecasting

By: Alok Kumar Yadav

MBA
 Concept of Forcasting
• Is the process of estimating the relevent
events of future,based on the analysis of
their past and present behaviour.
 Defination
• “Business forcasting refers to the statistical
analysis of the past and current movement
in the given time series so as to obtain clues
about the future pattern of those movement”
• W.M.Neter & W.J.Wasserman
 Importance Of forcasting
• Promotion Of Organization
• Key to Planning
• Coordination & Control
• Success In Organization
• It relates Future Events
• It define the probability of happining future
event
 Business Forecasting
• Costs and Benefits of Forecasting:
• Benefits:
– Aids decision making
– Informs planning and resource allocation
decisions
– If data is of high quality,
can be accurate
 Business Forecasting
• Some businesses use alternative methods:
• Astrologers!
• Is such a strategy any better
or worse than using quantitative
or qualitative methods?
 Business Forecasting
• Used to try to predict the future
• Uses two main methods:
• Qualitative – seeking opinions on which
to base decision making
– Consumer panels, focus groups, etc
• Quantitative – using statistical data to help inform
decision making
– Identifying trends
– Moving averages – seasonal, cyclical, random
– Extrapolation - simple
Business Forecasting
 Limitation Of Forcasting
• Based On Assumption
• Not Absolute
• Time & Cost Factor