Techniques of Business Forecasting
Business Forecasting Provides The Following Benefits:
Key to planning: Forecasting provides the vital facts and pertinent information for effective planning.it improves the quality of managerial planning in several ways.with the help of forecasting management can anticipate the future trends.
For Example– Sales Forecasting Helps In Identifying The Future Demand Patterns With Which Management Can Plan The Development Of A Profitable Product Mix
Executive development: Forecasting requires executives to look ahead,think through the future and improve their mental faculties. Managers develop the habit of collecting, analysing in interpreting data instead of depending on guesswork.
Means of coordination: People at different levels participate in the process of forecasting.regular interactions between the members of the organisation facilitate cooperation and among them.forecasting helps in integrating various departmental plans into the corporate plan.
Facing environmental challenges: Forecasting provides clues about the future events.with the help of this knowledge managers can save organisation from the impact of trade cycles and other threats. It provide a vision of the future.
Basis for control: Forecasting provides relevant information for exercising control. The managers can know their weaknesses in forecasting process and take suitable actions to overcome these. It can disclose the areas where control is lacking and once such areas are identified steps can be taken to make control effective.