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