Managers make forecasts all the time, although many are implicit rather than explicit. The aim of this chapter is to review the main forecasting methods that are available, and to show what should be considered in choosing the best method for a particular situation. Examples of composite forecasts are provided, which have the added value of demonstrating some of the trends which face modern business.
Forecasting is not the same as planning, although a plan may be based on certain forecasts: for example, of some of the environmental factors discussed earlier. One of the byproducts of a plan may be a forecast of the results that will be attained if it is implemented. So forecasts may be both part of the raw material of planning ...