Business forecasting uses qualitative and quantitative methods to predict future business conditions and trends. Qualitative methods gather opinions through surveys and focus groups, while quantitative analyzes statistical data to identify trends. Some alternative methods like astrology are unlikely to be more effective than traditional qualitative and quantitative approaches. Forecasting provides benefits like informed decision-making but also costs as data may be unreliable, outdated, or unable to account for unexpected external changes.

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4. 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

5. Business Forecasting Some businesses use alternative methods: Astrologers! Is such a strategy any better or worse than using quantitative or qualitative methods?

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7. 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

8. Business Forecasting Costs: Data not always reliable or accurate Data may be out of date The past is not always a guide to the future Qualitative data may be influenced by peer pressure Difficulty of coping with changes to external factors out of the business’s control – e.g. economic policy, political developments (9/11?), natural disasters – hurricanes, earthquakes, etc.