What Is Forecasting Ques 1
What is Forecasting? Meaning
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 meaning features steps importance
Features of Forecasting
Peculiarities, characteristics or features of forecasting are as follows:-
Forecasting in concerned with future events.
It shows the probability of happening of future events.
It analysis past and present data.
It uses statistical tools and techniques.
It uses personal observations.
Steps in Forecasting
Procedure, stages or general steps involved in forecasting are given below:-
Analysing 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.
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.
Collecting and analysing data: Data collection is time consuming. Only relevant data must be kept. Many statistical tools can be used to analyse the data.
Estimating future events: The future events are estimated by using trend analysis. Trend analysis makes provision for some errors.
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 actuals and the estimates, it is necessary to find out the reasons for poor performance.
Follow up action: The forecasting process can be
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 meaning features steps importance
Features of Forecasting
Peculiarities, characteristics or features of forecasting are as follows:-
Forecasting in concerned with future events.
It shows the probability of happening of future events.
It analysis past and present data.
It uses statistical tools and techniques.
It uses personal observations.
Steps in Forecasting
Procedure, stages or general steps involved in forecasting are given below:-
Analysing 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.
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.
Collecting and analysing data: Data collection is time consuming. Only relevant data must be kept. Many statistical tools can be used to analyse the data.
Estimating future events: The future events are estimated by using trend analysis. Trend analysis makes provision for some errors.
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 actuals and the estimates, it is necessary to find out the reasons for poor performance.
Follow up action: The forecasting process can be