1. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting

2. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting

3. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting

4. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting Used to try to predict the future Uses two main methods: Qualitative – seeking opinions on which to base decision making –Consumer panels, focus groups, etc Quantitative – using statistical data to help inform decision making –Identifying trends –Moving averages – seasonal, cyclical, random –Extrapolation - simple

5. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting Some businesses use alternative methods: Astrologers! Is such a strategy any better or worse than using quantitative or qualitative methods?

6. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting

7. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting Costs and Benefits of Forecasting: Benefits: –Aids decision making –Informs planning and resource allocation decisions –If data is of high quality, can be accurate

8. http://www.bized.co.uk Copyright 2006 – Biz/ed Business Forecasting Costs: –Data not always reliable or accurate –Data may be out of date –The past is not always a guide to the future –Qualitative data may be influenced by peer pressure –Difficulty of coping with changes to external factors out of the business’s control – e.g. economic policy, political developments (9/11?), natural disasters – hurricanes, earthquakes, etc.