Chapter 1 Forecasting for Management Decisions Business Forecasting Chapter 1 Forecasting for Management Decisions

Chapter Topics Introduction Importance of Forecasting Financial and Strategic Importance of Forecasting The Commonality of Forecasting

Importance of Business Forecasting Allows organizations to improve profits Essential in eliminating waste such as: Inventory shortages Missed due dates Plant shut-downs Lost sales Lost customers Expensive expediting Missed strategic opportunities.

Financial and Strategic Importance Better strategic information Better marketing information Better financial information Better operating information Increased customer service Better allocation of resources (Continued)

Financial and Strategic Importance Increased manufacturing and operating efficiency Higher productivity Stability in planning Reduced finished goods inventory Elimination of waste Increased profitability Increased return on investment.

The Commonality of Forecasting All organizations wish for excellence in management (whether manufacturing or a hospital). Demand for products, labor, materials, and other resources must be estimated using either formal or informal forecasting methods.

Business Forecasting The Art and Science of Forecasting The Forecasting Process

Business Forecasting Process

Chapter Summary Importance of Business Forecasting As a Strategic Tool Planning and Control Tool Various Application of Forecasting in Business The Art and Science of Forecasting The Process of Forecasting