Introduction to Forecasting Techniques

The Forecasting business situation is a complex task which cannot be accomplished with exactness. The  social, economic and political forces which shape the future are many and varied. Their relative importance changes almost regularly. It is obvious therefore, that the statistical methods cannot claim to be able to make the uncertain future to certain. It does not follow from this disclaimer that statistical techniques  have mouthing to contribute to business forecasting. The question arises is not between forecasting and not forecasting rather  it is what kind of forecast? The Lack of a forecast implies a dangerous type of forecast, the mere warning of the  possibility of a change is better than no warning at all as is wisely said forewarned is forearmed also is should be keep in mind that  the forecasts are not made just for the sake of forecasting that is they are not ends in themselves, the forecasts are made in order to assist management to determine a strategy and alternative strategies.

It may be pointed out that the forecasting is much more than projecting a series mechanically. Although future is some sort of extension of the past, but its changes  are numerous &  complex. They are often difficult to discover and to measure. They may appear in all types  of combinations and may be constantly changing. The fact that the past can never be a perfect guide to the future warns techniques or theoretical ideas to a list of unchanging variables; the successful forecasting requires expert blending or economic theory with significant statistical expertise and thorough familiarity with the relevant statistical data. Both qualitative & quantitative information must be utilized.

As a final word of cautions, it may be emphasized that no matter what techniques of forecasting are used, it is important  that the forecasts be casket by the judgment, the  statistical data is an attempt to substitute the facts for subjective in a given situation should be ignored in favor of quantitative data. It is particularly essential  to take into consideration that any specific plans of the business that might affect the pattern of sales in relation to indicators used of forecasting. Most successful forecasting will result by combining with the statistical forecasting the judgment and knowledge of current business trends.

Also it is important to emphasize that any forecast must  be reviewed frequently and revised into light of the most recent information. The Forecasting is not a one-end operations. To be effective, it requires continuous attention, unanticipated , or at least clarify. In terms of an original decisions and actions that have been taken this rule implies continuous modification wherever necessary, the methods of flexible budgets has been developed to permit the revision of the budget estimates and everyone dealing with the forecasts should be alert to the need for constantly checking to see if anything is  happened to change the outlook keeping accurately informed about the present level of business is probably the simplest insurance that can be secured against making the wrong decisions regarding the future.

Despite of  all advances that have been made in the techniques of forecasting remains more an art than a science. The value of a forecast lies not merely in its accuracy, but the fact that making its  requirement  a balanced consideration of factors influencing the future developments, right or wrong, further forecasting must  not be regarded merely as a means of peering into the future and then accepting what one sees; it needs to be used actively as a way of guiding the firm along the path its management feels is most desirable business forecasting what one sees: it requires to be used actively as a way of guiding the firm along the path its management feels is most desirable. The Business forecasting will not only help in the short-term control of operations its greatest contribution probably will come when it is able to improve short and long term corporate strategies.