2. Meaning of Forecasting
It is a systematic guessing of the future course of
events with the help of analysis of past and
present events. It provides basis for a planning.
Forecasting is the technique of estimating the
relevant future events and problems on the basis
of past and present behavior or happenings
3. Definition
Neter and Wasserman state “Business
forecasting 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 movements”
4. Importance of Forecasting
• Importance of Forecasting
• Pivotal role in an Key to
Organization Success
• Development of a Effective
Business Control
• Implementation of Co-ordination
Project Primacy to
Planning
5. TYPES OF FORECSATS:
• Economic forecast: To gauge the general economic
scenario and its effect on sales.
• Technological forecast: To predict what new
technologies can be developed, when and how to bring
feasibility to the operations involved.
• Competition forecast: To look into the competitor
strength and tactics and know where one stands.
• Social forecast: To predict the attitude of people
and social conditions.
• Supplier’s forecast: Reveals the response of suppliers.
6. FORECASTING TECHNIQUES:
1. Quantitative time series analysis:
Monthly sales data is plotted in a chart and the past
data helps in consolidating the sales volume and
fluctuations in sales. Sales trend is determined and
the assumption is that, the future will reflect the
past and present trend and hence can be projected.
If there is a lull in sales, reasons for the decline can
be known by taking feedback from various quarters
like, suppliers, consumers and employees.
7. FORECASTING TECHNIQUES
2. Derived forecast:
The forecast done for a specific purpose may be reused for
another purpose. For example a census data can help you to
determine the demography of a particular geographical area
that might help you to reach your target customers.
3. Casual methods:
If the underlying cause for the variable can be determined,
the forecast can be arrived mathematically and produce
quite accurate results. Social media marketing is very popular
now a days and instantly you know how many hits are
received for a particular product and the ratio of conversion
into sales.
8. FORECASTING TECHNIQUES
4. Brain storming:
People with knowledge and expertise assemble in order to discuss the
pros and cons of a particular idea, be it the launch of a new
product, product promotion or withdrawal of a product line.
5. Delphi method:
In this method, each and very expert is contacted independently and
opinions are drawn without the knowledge of the responses of other
experts. After collecting all the responses, each participant considers
the responses of other expert authors and suggests revisions. Three or
four rounds later, a consensus is arrives at and the unique feature of
this method is no direct debate or discussions.
