· Expand the writing

· Include time-series and causal models 

· Include descriptions for each type in the body of your essay to help give the reader a basic understanding of what each forecasting method entails.

Running Head: Forecasting techniques 1

Forecasting techniques 3

Forecasting Techniques

Michael Whitener

Forecasting techniques

Forecasting is a technique used for anticipation that provides vital information relating to the future of a business. Forecasting sets the basis of all planning activities in a company hence making it an important component of business management. Forecasting involves gathering data about the past and present of a certain activity and using the data to make predictions about the future. The fact that the success of any business depends on the ability of the management to make efficient forecasts and to prepare for future events makes forecasting a crucial technique for management of an organization.

Forecasting techniques are either qualitative techniques or quantitative techniques (Abu-Mostafa, & Atiya, 1996). Under the qualitative methods, the techniques include historical analogies, visionary forecasts, and market research. Under quantitative method, the techniques include moving averages, summary statistics, and regression models. Forecasting techniques apply to various departments including operations management, marketing, finance and risk management, industrial process control, and economics. According to Armstrong, Brodie, & McIntyre, (1987), some of the factors to consider when forecasting are the kind of forecast needed, the existing situations, the appropriate forecasting horizon, the relevant data available, the frequency for making the forecast, the personnel responsible for making the forecast, the users of the forecast and the process for making the forecast. Other factors include when the forecast is needed and the uncertainty associated with the forecast.

In conclusion forecasting sets the basis of all planning activities in a company hence making it an important component of business management. Forecasting can either be done qualitatively of quantitatively with the most techniques used being regression model, smoothing models and time series. Based on the survey, a conclusion can therefore be made that forecasting is essential to the management of a business.

References

Armstrong, J. S., Brodie, R. J., & McIntyre, S. H. (1987). Forecasting methods for marketing: Review of empirical research. International Journal of Forecasting, 3(3-4), 355-376.

Abu-Mostafa, Y. S., & Atiya, A. F. (1996). Introduction to financial forecasting. Applied intelligence, 6(3), 205-213.