Question

Think of all the examples of forecasting that is experience on a regular basis; such as the weatherman on TV each night. Now, considering the technology we have at our disposal today, why can't we get a "Perfect" forecast?

Answer 1

We cannot get a perfect forecast for various reasons. Below mentioned are some of the reasons:

The software we use to get a forecast is good enough to give us a rough idea of the future and it still required improvement to make it a perfect tool for forecasting. It is not easy to build a tool that can consider thousands of factors that can contribute to the fate of an activity that is going to happen in the future.

People are never satisfied with the forecast results and keep making changes by adding the latest information and data. This leads to fluctuations in the value and the adjustment made will change the values. This process is called fiddling and this destroys the accuracy of the forecast.

The forecast should be considered as a dispassionate and scientific method of finding the best value. People having a biased mindset and personal agendas can also lead to changes in the value of the forecast. At the end of the day what the company wants to see in the report will appear after the required adjustments.

The desired level of accuracy of 100% is highly unachievable. This is because of the number of factors involved in the prediction. The nature of the behavior determines how well we can forecast it and the same principle applies to the businesses as well.