Choosing a Forecasting Method

The sales manager faced with a forecasting problem has a dilemma: which forecasting method should be used and how accurate is the forecast likely to be? The dilemma is particularly acute when several methods are tried and the forecasts don’t agree.

Each method has advantages and disadvantages, and the decision of which to use will not always be clear. In a typical company, the decision will more than likely depend on its level of technical sophistication and the exercise of historic sales data. It will also likely depend on the use to which the forecast will be put. A forecasting system designed to estimate production scheduling and inventory requirements may rely on a completely different set of procedures than one designed to plan marketing strategy. One guide a manager might find useful when choosing a forecasting method is what other companies have done.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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