business forecasting
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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 - PowerPoint PPT PresentationTRANSCRIPT
Business Forecasting
Chapter 1Forecasting 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
No
Figure 1.1 The Forecasting Process
Feed
back
Loo
p
Yes
Management’s Question/Problem
Data Gathering
Model Formulation
Design the Forecasting Experiment
Analysis and Interpretation
Valid Results?
Report Results
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