1. (A) What is forecasting? Why is it so
important in the management of business
firms and other enterprises?
(B)What are the different types of forecasting?
(C)How can the firm determine the most suitable forecasting method to use?
6 years ago
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³√cartha...
Best Answer - Chosen by Voters
A.) Forecasting is the science of predicting future outcomes. In business, it applies to the future
of a business, product, or industry. It's extremely important for a business to do proper
forecasting before developing new products or product lines, lest you spend a lot of time and
money developing a product that fails in the marketplace. An excellent example of a failure in
forecasting is New Coke.
B.) This question sounds like it's looking for types that are given in your textbook somewhere.
However, here are some ideas:
From wikipedia (since their description was concise and well written):
Product forecasting is the science of predicting the degeree of success a new product will enjoy
in the market place. To do this, the forecasting model must take into account such things as
product awareness, distribution, price, fulfilling unmeet needs and competitive alternatives.
Trend estimation is the application of statistical techniques to make and justify statements based
on trends in data. For example, trying to discern if the trend of a certain industry's expansion will
continue, level off, or actually reverse itself.
Technology forecasting is forecasting the future characteristics of useful technological machines,
procedures or techniques.
C.) Again, this question is probably looking for information already given to you in the textbook
or assignment.
I'll take a stab:
1.) Analyzing the methods used by similar successful companies, and modifying them for their
own business plan.
2. 2.) Try several, and see which method work best with the available data, and which methods
seem to produce the best results (trial and error).
Source(s):
http://en.wikipedia.org/wiki/Forecasting
http://en.wikipedia.org/wiki/Product_for…
http://en.wikipedia.org/wiki/Predictive_…
