Forecasting System Performance Criteria:

The effectiveness of a forecasting system in serving the organization may be determined by using any or all of the following four criteria.

1. Time needed to prepare forecast

2. Accuracy of forecast

3. Objectivity in the treatment of past data

4. Stability and sensitivity

Time Required to Prepare Forecast

A forecasting system is effective if this provides needed forecasts on time for taking decisions that rely on them. If it is not succeed to do so, it becomes just as good as an old newspaper.