Gerard Arca

BSBA ma 3-2

1. Discuss the purpose of Forecasting.

Forecast is any attempt to try and predict the future based on quantitative or
non-quantitative means. To achieve a certain organizational goal, one must try to
foresee the possibilities of the alternative it uses.

The main purpose of forecasting is to use the possible future to be prepared. If

an organization is able to predict what would happen, it can use this prediction to plan
for its course of actions and solutions for the possible problems it might encounter upon
the happening of the expected event, and, it can use its prediction as well as a tool for
success to work effectively and efficiently and be more competitive against its
competitors.

2. Briefly differentiate quantitative from non-quantitative means of forecasting.

In order to come up with a more accurate forecast, we need certain information
that will help us obtain our goal. It can be Quantitative or Non-Quantitative.

Quantitative means of forecasting is the attempt to predict the future using

quantitative techniques and formulas. This uses numbers/amounts in order to calculate
a future amount that will be useful for the organization’s decision making especially on
decisions that are concerned with its inventories, expected sales and expenses, and
predicting its profit. While Non-Quantitative means of forecasting uses intuition, trends,
experiences, facts/opinions, etc. This means of forecasting helps an organization through
providing possible future that cannot be calculated and supplied by formulas.

3. What is a “Causal System”?

One of the features common to all forecasts is that forecasting techniques
generally assume that the same underlying causal system that existed in the past will
continue to exist in the future.
Causal system pertains to all factors and considerations why a certain future
event will happen.