Mathematical forecasting in modern management refers to the use of mathematical

methods and models to predict future outcomes and make informed decisions. It is an
important tool for planning and decision-making in various fields, including economics,
labour market analysis, and business strategy. Mathematical forecasting allows for the
identification of quantitative relationships between complex processes and helps
eliminate subjectivity in planning. It involves the application of various techniques such
as system analysis, statistical methods, multivariate analysis, trend analysis,
correlation and regression analysis, simulation modelling, and machine learning.

Benefits of Forecasting

• Forecasting helps in setting goals and plans ahead of time — Analyzing

data and statistics helps businesses better evaluate their progress and adapt
business operations accordingly.
• Forecasting helps in allocating a business budget — A forecast will give
you estimates about the amount of revenue or income that is expected in a
future period. This, in turn, helps companies get insight into where to allocate
their budget.
• Forecasting helps in predicting market changes — Data and projections
help companies make better adjustments to their strategies and improve
operations in order to meet current market trends. This, in turn, helps them
stand out from the competition.

There are two types of methods of mathematical forecasting, 1st is Qualitative

methods of mathematical forecasting, 2nd is Quantitative methods of mathematical
forecasting. here I will only focus in Quantitative methods of mathematical forecasting.

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In order to make realistic and accurate forecasts, quantitative methods include

mathematical processes such as:

• Algebra,
• Permutations and combinations,
• Set theory,
• Matrix algebra, and
• Integration.

In addition, mathematical forecasting techniques such as linear programming,

dynamic programming, and inventory control can also help decision-makers guide
their business strategies.

Quantitative methods of mathematical forecasting also include statistical processes

such as:
• Standard deviation,
• One factor analysis of variance,
• Multi-factor analysis of variance,
• Two sample t-test for equal means,
• Autocorrelation, and
• Hypothesis test.
So, rather than basing the results on opinion and intuition — quantitative methods
mathematical forecasting implements readily available data to interpret results. These
methods are usually used to make short-term predictions by analysing older, raw data.

Finally, quantitative methods of mathematical forecasting can be further divided into

two models

• Associative models (causal models) — The variable that is being forecasted

is associated with other variables, thus, the projections are built on that
relationship. Examples of causal models include: simple linear and multiple
linear regression.

• Time-series forecasting models — Examine past patterns in the data in order

to predict future patterns. Examples of time-series models include: straight-line
method, moving average, exponential smoothing, and trend projection.

Mathematical forecasting can be also seen in various fields such as weather

forecasting [1] and stock price forecasting [2]. In weather forecasting, models like
Multiple Linear Regression (MLR) and trend projection merged to software in order to
predict weather parameters based on recorded data [3]. Similarly, in stock price
forecasting, mathematical models based on stochastic differential equations are used
to estimate the drift and volatility coefficients, which are then used to simulate future
stock prices [4]. These examples demonstrate how mathematical models can be used
to make predictions in different domains.

https://ieeexplore.ieee.org/document/8903856

https://www.atlantis-press.com/proceedings/fred-19/125931830

https://link.springer.com/chapter/10.1007/978-3-319-20774-2_4

https://clockify.me/forecasting-models