Understanding Forecasting Techniques

It is true to say that businesses conduct their activities in an uncertain environment where they rely on forecasting to aid their managerial decision making. This has in a big way reduced the uncertainty they are subjected to. For this to be effective there are some very specific prerequisites that should be considered to get the best forecast. One, it must be internally consistent with output and capacity (Dwivedi, & Dwivedi, 2009). It should also be cost effective and timely where fore the forecast to be done some accuracy is to be sacrificed. This is important because it ensure security for the business facilities and activities. Most importantly the forecast should have a good sense of history to at least create some accuracy in whatever measurements and forecast is made.

Reference

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Dwivedi, D. N., & Dwivedi, D. N. (2009). Essentials of business economics. Noida, U.P: Vikas Pub. House Pvt. Ltd.

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