Question

What is business forecasting? Explain the stages of development for business forecasting. Why is business forecasting and predictive analytics necessary for success? Are there ethical, legal or faith issues to consider in this process?

Answer 1

1

Business forecasting

It is a method of predicting the future of business.for that it uses some past data and information. Here the prediction is based on economical factors. Nobody can foresee the future, it is always uncertain and may have many risks. So for minimizing the chances of risk, the business will forecast the operations and all by some economical and market studies.

2-STEPS

1 Identify the Problem

This is the first step coming under business forecasting. here it deals with what we are gonna forecast.before introducing a product to the market,the businessman should get the condition of the market and the taste of the customers, what type of products they are willing to buy, at what price, etc. Here nobody can predict the future but we can expect a certain percentage from our market study.

2 Collect Information

here in this case if we are newly introducing a product to the market, then there will be a lack of information.ie for predicting the future, then we are assisting the past product data and experts opinion, in case of a new product, that past data may not be available.so the information needed for forecasting will be the expert opinions.

If the data are available, then there is a model used for predicting the future.it is called quantitative forecasting.

3 Perform a Preliminary Analysis

Before going for the main analysis, conducting a patch test is very much helpful. So at that moment itself we could understand that the data selected are useful for prediction or not. and if yes take the expert's opinion for choosing the correct amount of data to be analyzed for prediction.it helps to minimize the work load of analysis.

4 Choose the Forecasting Model

Here it chooses the best method for predicting the future.it includes qualitative and quantitative model

qualitative -we already mentioned it earlier.it further divided into market research and the Delphi model. Under market research, a survey is conducted and ask the customers about their willingness to buy a product, and under Delphi method, the expert opinion is taken as a key for prediction purpose

Quantitative model-if there is no data is available, in such cases, the mathematical tools will be used as an agent to predict the future like regression correlation, etc

5 Data analysis
After selecting a suitable model, run the data through it.

6 Verify Model Performance

in the last step, the predicted data should be compared with the actual data in order to find out the effectiveness of the model as well as the study conducted. After considering all of these correct it if needed.

3

The main purpose of predicting the future is to reduce the uncertainties. The future is always uncertain and cant be seen in advance. In order to minimize the risk, the business man should try to predict the future. the planning and decision making is based on this prediction. if this goes wrong then everything will be lost.

4

There is no other things to be consided while making forecasting decisions.it is completely an ethical thing,the moreover the future is not in our hand and the result will be a faith whatever it is