A strategic type of forecast should be used for strategy, sourcing, and location decisions.
What is Forecasting?
- The process of forecasting entails creating predictions based on historical and current data.
- These can then be contrasted (resolved) with what actually occurs.
- For instance, a business can predict its revenue for the following year and then contrast that prediction with the actual outcomes.
- A comparable but more broad phrase is prediction.
- Depending on the context, the term "forecasting" may apply to particular formal statistical techniques using time series, cross-sectional data, or longitudinal data, or it may refer to less formal judging techniques or the prediction and resolution process itself.
What is the forecast's purpose?
- Forecasting examines how hidden currents in the present suggest potential changes in direction for businesses, societies, or the entire planet.
- Prediction is concerned with future certainty.
- Therefore, the main objective of forecasting is to identify the entire spectrum of possibilities rather than a small number of illusory certainties.
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