In business, forecasting is defined as a tool that helps businessmen cope with the future’s uncertainty. It heavily relies on past & current data and analysis of trends.
In a sense, forecasting allows businessmen to make educated guesses on some areas of their businesses. With forecasting, they’re able to make necessary adjustments based on forecasted situations and scenarios.
Some of the advantages of forecasting in business include:
- Sense of direction
- Keeps businesses up-to-date
- Learning from past mistakes and experience
- Improve budgeting
But despite the advanced technologies, theories, and tools we’re using today to forecast, these “educated guesses” can still go wrong.