Utility of forecasting

Utility of Forecasting:

Forecasting reduces the risk associated with business fluctuations which generally produce harm­ful effects in business, create unemployment, induce speculation, discourage capital formation and reduce the profit margin. Forecasting is indispensable and it plays a very important part in the determi­nation of various policies. In modem times forecasting has been put on scientific footing so that the risks associated with it have been considerably minimised and the chances of precision increased.

Forecasts in India:

In most of the advanced countries there are specialised agencies. In India businessmen are not at all interested in making scientific forecasts. They depend more on chance, luck and astrology. They are highly superstitious and hence their forecasts are not correct. Sufficient data are not available to make reliable forescasts. However, statistics alone do not forecast future conditions. Judgment, experience and knowledge of the particular trade are also necessary to make proper analysis and interpretation and to arrive at sound conclusions.

Conclusion:

Decision support systems consist of three elements: decision, prediction and control. It is, of course, with prediction that marketing forecasting is concerned. The forecasting of sales can be re­garded as a system, having inputs apprises and an output.
This simplistic view serves as a useful measure for the analysis of the true worth of sales forecasting as an aid to management. In spite of all these no one can predict future economic activity with certainty. Forecasts are estimates about which no one can be sure.

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