Forecasting is one of the most important business tools that are highly used by business executives. Forecasting is based on the concept that managing the future is an important business concept that just thinking of the past. This is because the future of the organization can be used to transform it even in the event of a dirty past (Mast, 2006). The dataset can be used to demonstrate that both the time series and causal forecasting are important elements of comparison. The ability of the organizations to use the forecasting in their decision making strategies can help predict and shape the future of any organization (Hines, Holweg & Rich, 2004).
Forecasting is very necessary for the success of the organizations since the business environment is highly affected by trends which are beyond the control of human beings. Since accuracy is rarely achieved within an organization, forecasting enables the organization to operate within the limits of errors that are not dangerous to the business (Hayes, 2003). Since experience makes things better, the more practice the managers’ forecasts on an issue, the more accurate their forecast is with time. In this regard, the adaptive organizations put more emphasis on the rolling views, rather than focusing on the annual budgets and long-term views. The rolling forecast is mainly used in forecasting since it looks at the 12 to 18 months ahead to form useful information that can connect the parts of the operations together. In addition, provides the senior management with more useful information that provides both the long-term and the short-term picture of the organization for decision making purposes (Kaplan, & Norton, 2008).
Forecasting can be used in an industry in such a way that is currently not being done. But before this, the company needs to carefully linked with the operations of the company in order to avoid possible errors that may result from forecasting. After this, the company should have a central oversight unit with quality programs that supports the recommendations from forecasting. The decisions that would be impacted from forecasting will entail operations decisions and the overall business strategy decisions.
Hayes, J. M. (2003). Forecasting computer usage. Journal of Statistics Education, 11(1). This article is available at http://www.amstat.org/publications/jse/v11n1/datasets.hays.html
Hines, P., Holweg, M., & Rich, N. (2004). Learning to evolve: a review of contemporary lean thinking. International Journal of Operations & Production Management, 24(10), 994–1011.
Mast, J. (2006). Six Sigma and competitive advantage. Total Quality Management and Business Excellence, 17(04), 455-464.
Kaplan, R. S., & Norton, D. P. (2008). The execution premium: linking strategy to operations for competitive advantage [Abstract]. Harvard Business Press. This book abstract is found at www.economist.com/media/pdf/Kaplan.pdf.