Forecasting
Businesses use forecasting to predict future, trends, patterns, and business with data to develop a forecast. This data is used to predict future sales. In forecasting we use testing and reasonableness to predict future events. Companies use this method to compare their sales with other companies. Forecasting has many benefits to include; what is the popular product customers are purchasing, and it enhances cash flow, and identifies patterns and trends inside a corporation. Using this method is popular and is quite achieving when done effectively.
Forecasting can result in decrease in product cost, increase company efficiency, and increase revenue. This method has to be administered at it entirely to reap the best benefits. Forecasting also requires a company to keep record of inventory, sales, and customer satisfaction. Many items are needed such as; financial statements, accounting records. In order to be successful you have to know what the customers want and why they want it.
Something’s that can affect the benefits of forecasting is weather, consumer income for example a recession, changes in population, and product changes. I have notice with some businesses, for example Chik Fila years ago changed their chicken. Something like this could cause changes in forecasting and profits.
Eight Steps to Forecasting
Determine the use of the forecast- what objective are we trying to obtain?
Select the items or quantities that are to be forecasted.
Determine the time horizon of the forecast is it 1 to 30 days (short term), 1 month to 1 year (medium term), or more than 1 year (long term)?
Select the forecasting model or models.
Gather the data or information needed to make the forecast.
Validate the forecasting model.
Make the forecast.
Implement the results
(Render, Stair)
In forecasting there are many types. The type that my group and I chose is time-series model and qualitative models. The time series model predicts the future through using
Forecasting can result in decrease in product cost, increase company efficiency, and increase revenue. This method has to be administered at it entirely to reap the best benefits. Forecasting also requires a company to keep record of inventory, sales, and customer satisfaction. Many items are needed such as; financial statements, accounting records. In order to be successful you have to know what the customers want and why they want it.
Something’s that can affect the benefits of forecasting is weather, consumer income for example a recession, changes in population, and product changes. I have notice with some businesses, for example Chik Fila years ago changed their chicken. Something like this could cause changes in forecasting and profits.
Eight Steps to Forecasting
Determine the use of the forecast- what objective are we trying to obtain?
Select the items or quantities that are to be forecasted.
Determine the time horizon of the forecast is it 1 to 30 days (short term), 1 month to 1 year (medium term), or more than 1 year (long term)?
Select the forecasting model or models.
Gather the data or information needed to make the forecast.
Validate the forecasting model.
Make the forecast.
Implement the results
(Render, Stair)
In forecasting there are many types. The type that my group and I chose is time-series model and qualitative models. The time series model predicts the future through using