Forecasting involves making predictions about future events or occurrences. The forecasting process involves 6 steps: 1) analyzing the problem, 2) developing a sound foundation using available data and experience, 3) collecting and analyzing relevant data, 4) estimating future events using trend analysis, 5) comparing actual results to estimates, and 6) taking follow up action based on lessons learned. There are two main types of forecasting methods - qualitative methods based on judgment and quantitative methods based on mathematical models.

1. Forecasting:-
A prediction, projection, or estimate of some future activity, event, or
occurrence.
Steps in Forecasting
Procedure,stages or general steps involved in forecasting are given below:-
1. Analyzing and understanding the problem:
The manager must first identify the real problem for which the forecast is to be
made. This will help the manager to fix the scope of forecasting.
2. Developing sound foundation:
The management can develop a sound foundation, for the future after considering
available information, experience, type of business, and the rate of development.
3. Collecting and analyzing data:
Data collection is time consuming. Only relevant data must be kept. Many
statistical tools can be used to analyze the data.
4. Estimating future events:
The future events are estimated by using trend analysis. Trend analysis makes
provision for some errors.
5. Comparing results:
The actual results are compared with the estimated results. If the actual results
tally with the estimated results, there is nothing to worry. In case of any major difference
between the actual and the estimates, it is necessary to find out the reasons for poor
performance.
6. Follow up action:
The forecasting process can be continuously improved and refined on the basis of
past experience. Areas of weaknesses can be improved for the future forecasting. There
must be regular feedback on past forecasting.

2. Types of forecasting methods.
The types of forecasting methods are as following:-
 Quantitative methods
 Quantitative methods
1. Qualitative methods:-
These types of forecasting methods are based on judgments, opinions,
intuition, emotions, or personal experiences and are subjective in nature.
They do not rely on any rigorous mathematical computations.
2. Quantitative methods:
These types of forecasting methods are based on mathematical
(quantitative) models, and are objective in nature. They rely heavily on
mathematical computations.