Business Forecasting
Forecasting can be generally regarded as a method or techniques for approximating several forthcoming facets of businesses or other operations. Forecasting can be achieved by using several methods. An example of that is a wholesale business that has been operational for 15 years, that business would be able to forecast the business’s capacity of the sales in the approaching year derived from its proficiency over the past 15 years of being in business. Forecasting method uses the historical data of a business to create a future forecast of the business. (www.referenceforbuisness.com)
FORECASTING The term forecasting can seem to be extremely technical, planning for the future is a crucial part of managing any business, nonprofit, or other organization. How well management of an organization can forecast its future and create the right procedures to deal with prospective future circumstances is closely related to the continuing success of the organization. While a manager can get an imprecise indication of what the future may hold from relying on intuition, good judgment, and awareness of how the economic market is going, it is not the easiest thing to translate feelings about the future into an accurate and beneficial number, such as the following annual sales capacity or the cost per unit produced. Because of that, forecasting techniques are used to approximate imminent characteristics of a business operation.
If a person wanted to prepare the quarterly sales volume forecasts, then that person would have to do an analysis of the definite sales statistics for the particular merchandise for previous periods. If the person doing the forecasting has access to the definite sales statistics for each quarter over the past 15 year period that the organization has been operational, the person would use the statistics to identify the overall amount of sales. They would then be able to determine if there is a tendency or repetition, for example if sales
FORECASTING The term forecasting can seem to be extremely technical, planning for the future is a crucial part of managing any business, nonprofit, or other organization. How well management of an organization can forecast its future and create the right procedures to deal with prospective future circumstances is closely related to the continuing success of the organization. While a manager can get an imprecise indication of what the future may hold from relying on intuition, good judgment, and awareness of how the economic market is going, it is not the easiest thing to translate feelings about the future into an accurate and beneficial number, such as the following annual sales capacity or the cost per unit produced. Because of that, forecasting techniques are used to approximate imminent characteristics of a business operation.
If a person wanted to prepare the quarterly sales volume forecasts, then that person would have to do an analysis of the definite sales statistics for the particular merchandise for previous periods. If the person doing the forecasting has access to the definite sales statistics for each quarter over the past 15 year period that the organization has been operational, the person would use the statistics to identify the overall amount of sales. They would then be able to determine if there is a tendency or repetition, for example if sales
References: Render, B., Stair, R. M., & Hanna, M. E. (2011). Quantitative Analysis for Management, 11th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781269651998/id/ch05 Beattie, Andrew. (2014) The Basics Of Business Forecasting. Investopedia. Retrieved 12/24/2014 from http://www.investopedia.com/articles/financial-theory/11/basics-business-forcasting.asp Smedley, Tim. (2012) Business forecasting is key: here’s how to go about it. The Guardian. Retrieved 12/24/14 from http://www.theguardian.com/small-business-network/2012/sep/03/small-business-forecasting-tips Reference for Business. (2014) Forecasting. Encyclopedia of Business , 2nd Edition. Retrieved 12/24/14 from http://www.referenceforbusiness.com/encyclopedia/Fa-For/Forecasting.html