Forecasting in Quantitative Analysis
FORECASTING IN QUANTITATIVE ANALYSIS
I am highly honoured to give a presentation on forecasting. You are all welcome. Every organisation’s success depends on how well it is able to forecast. We will look at the meaning of forecast, the steps, qualitative and quantitative forecasting and finally the benefits.
The Meaning Of Forecasting
Forecasting is a process of predicting or estimating the future based on past and present data. Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions. Forecasting is the basis of premising. Forecasting uses many statistical techniques. Therefore, it is also called as Statistical Analysis.
Forecasting can be broadly considered as a method or a technique for estimating many future aspects of a business or other operation. Planning for the future is a critical aspect of managing any organization, and small business enterprises are no exception. Indeed, their typically modest capital resources make such planning particularly important. In fact, the long-term success of both small and large organizations is closely tied to how well the management of the organization is able to foresee its future and to develop appropriate strategies to deal with likely future scenarios. Intuition, good judgment, and an awareness of how well the industry and national economy is doing may give the manager of a business firm a sense of future market and economic trends. Nevertheless, it is not easy to convert a feeling about the future into a precise and useful number, such as next year's sales volume or the raw material cost per unit of output. Forecasting methods can help estimate many such future aspects of a business operation.
"Perfect accuracy [in forecasting] is not obtainable," warned Richard Brealey and Stewart Myers in Principles of
I am highly honoured to give a presentation on forecasting. You are all welcome. Every organisation’s success depends on how well it is able to forecast. We will look at the meaning of forecast, the steps, qualitative and quantitative forecasting and finally the benefits.
The Meaning Of Forecasting
Forecasting is a process of predicting or estimating the future based on past and present data. Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions. Forecasting is the basis of premising. Forecasting uses many statistical techniques. Therefore, it is also called as Statistical Analysis.
Forecasting can be broadly considered as a method or a technique for estimating many future aspects of a business or other operation. Planning for the future is a critical aspect of managing any organization, and small business enterprises are no exception. Indeed, their typically modest capital resources make such planning particularly important. In fact, the long-term success of both small and large organizations is closely tied to how well the management of the organization is able to foresee its future and to develop appropriate strategies to deal with likely future scenarios. Intuition, good judgment, and an awareness of how well the industry and national economy is doing may give the manager of a business firm a sense of future market and economic trends. Nevertheless, it is not easy to convert a feeling about the future into a precise and useful number, such as next year's sales volume or the raw material cost per unit of output. Forecasting methods can help estimate many such future aspects of a business operation.
"Perfect accuracy [in forecasting] is not obtainable," warned Richard Brealey and Stewart Myers in Principles of
References: 1. Armstrong, J. Scott (ed.) (2001) (in English). Principles of forecasting: a handbook for researchers and practitioners. Norwell, Massachusetts: Kluwer Academic Publishers. ISBN 0-7923-7930-6. 2. Flyvbjerg, Bent, 2008, "Curbing Optimism Bias and Strategic Misrepresentation in Planning: Reference Class Forecasting in Practice," European Planning Studies, vol. 16, no. 1, January, pp. 3-21. 3. Ellis, Kimberly (2010) (in English). Production Planning and Inventory Control. McGraw-Hill. ISBN 0-412-03471-9. 4. Geisser, Seymour (1 June 1993) (in English). Predictive Inference: An Introduction. Chapman & Hall, CRC Press. ISBN 0-390-87106-0. 5. Gilchrist, Warren (1976) (in English). Statistical Forecasting. London: John Wiley & Sons. ISBN 0-471-99403-0. 6. Hyndman, R.J., Koehler, A.B (2005) "Another look at measures of forecast accuracy", Monash University note. 7. Makridakis, Spyros; Wheelwright, Steven; Hyndman, Rob J. (1998) (in English). Forecasting: methods and applications. New York: John Wiley & Sons. ISBN 0-471-53233-9. 8. Kress, George J.; Snyder, John (30 May 1994) (in English). Forecasting and market analysis techniques: a practical approach. Westport, Connecticut, London: Quorum Books. ISBN 0-89930-835-X. 9. Rescher, Nicholas (1998) (in English). Predicting the future: An introduction to the theory of forecasting. State University of New York Press. ISBN 0-7914-3553-9. 10. Taesler, R. (1990/91) Climate and Building Energy Management. Energy and Buildings, Vol. 15-16, pp 599 – 608. 11. Turchin, P. (2007) "Scientific Prediction in Historical Sociology: Ibn Khaldun meets Al Saud". In:History & Mathematics: Historical Dynamics and Development of Complex Societies. Moscow: KomKniga. ISBN 978-5-484-01002-8