Page 76 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management Pretty Bhalla, Lovely Professional University

Notes Unit 4: Forecasting and Premising

CONTENTS
Objectives
Introduction
4.1 Forecasting

4.1.1 Essential Components in Business Forecasting
4.1.2 Determinants of Business Forecasts
4.1.3 Benefits of Forecasting
4.1.4 Limitations of Forecasting

4.1.5 Techniques of Forecasting
4.1.6 Combining Forecasts
4.1.7 Difficulties in Forecasting Technology
4.2 Premising
4.3 Summary
4.4 Keywords

4.5 Self Assessment
4.6 Review Questions
4.7 Further Readings

Objectives

After studying this unit, you will be able to:

State the meaning and significance of forecasting
Discuss techniques of business forecasting
State the advantages and limitations of business forecasting

Introduction

Forecasting is the process of estimation in unknown situations. Business forecasting is a
systematic attempt to probe into the future, so as to identify the threats and opportunities and
achieve goals successfully by making and implementing well designed plans of action. Business
forecasting helps in analysing the economic, political and market information to reduce the
risks involved in making business decisions and long-range plans. Forecasts make management
think ahead and give singularity of purpose to planning by concentrating attention on the
future. Business forecasting involves a 'look ahead' approach in business.

4.1 Forecasting

Business forecasting involves a wide range of tools, including simple electronic spreadsheets,
Enterprise Resource Planning (ERP) and Electronic Data Interchange (EDI) networks, advanced
supply chain management systems, and other Web-enabled technologies.

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