- Companies recognise the importance of forecasting.
- Forecasting is the basis for corporate, long-range strategic planning.
- In finance and accounting, forecasts provide the basis for budgetary planning and cost control.
- Marketing relies on sales forecasting to plan new products, compensate sales personnel, and make key decisions.
- Operations management uses forecasts to make periodic decisions involving process selection, capacity planning, facility layout, and for continual decisions about production planning, scheduling and inventory.
- Service operations use forecasting to predict customer demand so they can better serve customers and control costs.
- Forecasts are not perfect.
- There are many factors which cannot be predicted/controlled.
- Managers must continually review forecasts and live with the fact that they are not 100% accurate.
- The best forecasting method should be selected within reason.
- Obtaining improvements in forecasting (even small) come at a high cost and may not be worthwhile after you have used a reasonable forecasting method.
I am Peter, a blogger, SEO and social media person who has an interest in E-commerce, ERP and CMS systems. You can contact me by e-mail: kaizenlog@gmail.com
