Question

How exactly is forecasting utilized in business operations? (Hint: use the example of warehousing distribution)

Answer 1

Forecasting in business operations

Forecasting is concerned with the use of past data for estimating or predicting the future. It helps a business concern in the preparation of plans, budgets, etc. The following are the way in which forecasting could be utilized in business operations.

• It helps a business in taking calculated risks in connection with different operations of an organization.
• It enables a business to make informed decisions in connection with various aspects of the business.
• It helps the warehousing department to keep optimal inventory.
• It helps the warehousing department to know whether the inventory available in the warehouse is adequate or not.
• It helps the marketing department in predicting future customer demand.
• It helps the finance department in predicting future financial requirements.
• It helps in the proper distribution of organizational resources.
• It helps an organization in reducing the total cost of operations.
• It helps an organization in assigning the future duties of its employees.