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The Role of Forecasting for Business Essay

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Updated: Jun 22nd, 2021

Forecasting is essential for business as it allows identifying specific factors that will influence the operations. These techniques can help predict the supply, demand, and other indicators for products and services. Flostrand (2017) states that managers can “rely on their own intuition and judgment or resort to the insights of others” (para 1). This is because they often do not possess quantifiable data that can be used to resolve an issue. Considering this, the Delphi technique is crucial as it helps create forecasts for uncertainties relying on the opinions of experts. The process involves polling the specialists on their opinion regarding a problem, collecting the responses, giving the answers to other experts, and repeating the process until a consensus is reached (Flostrand, 2017). Therefore, the Delphi technique is useful in cases where the data amount is limited, and the opinion of specialists is the only option for performing a forecast.

Both in daily lives and business, the extensive use of computers offers a new way of forecasting. Weingärtner, Bräscher, and Westphall (2015) state that Cloud services provide a lot of functions that can be used by businesses to enhance their forecasting techniques. Thus, surveys and various market researches can be performed in this way, making it easier for both the researchers and the respondents. Furthermore, the computers allow utilizing techniques of data analysis that would enable receiving results of forecasts more quickly.

Different tasks may require a variety of forecasting techniques to carry out the process correctly. For example, Kahn (2014), states that forecasting for a new product should differ from the methods used to determine the values of existing commodities. The process of choosing the approach should include evaluating the data, plan, measurement, forecast, and analytics. In cases of new products, only a small number of data is available which requires qualitative methods of forecasting.

References

Flostrand, A. (2017). Harvard Business Review. Web.

Kahn, K. B. (2014). Harvard Business Review. Web.

Weingärtner, R., Bräscher, G. B., & Westphall, C. B. (2015). Cloud resource management: A survey on forecasting and profiling models. Journal of Network and Computer Applications, 47, 99–106. Web.

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IvyPanda. 2021. "The Role of Forecasting for Business." June 22, 2021. https://ivypanda.com/essays/the-role-of-forecasting-for-business/.

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IvyPanda. (2021) 'The Role of Forecasting for Business'. 22 June.

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