Question

Forecasting is an uncertain science since it calls for predictions but current theoretical and mathematical models (quantitative and qualitative) make it possible for organizations to predict with an acceptable margin of error. Think about it this way: Without forecasting, organizations would always be responding rather than acting.

Select one industry from the list below: Bank, restaurant, health clinic/hospital, airline, or university.

What specific variables would be needed by that organization in order to forecast? Be sure you explain why you selected each variable and why it is important to forecasting.

Which variables are used for short-range forecasting, long-range forecasting, or for both. Make sure you support your selections.

Answer 1

I would describe the Health Care industry.

1. There can be a number of forecasting for example:-
   1. Capital Forecast : In this kind of forecasting , the main thing which is being covered is the capital expenditure requirement of any particular industry. When we talk about healthcare industry these capital variables will include the items such as building, land, furniture & fixtures, medical equipments, factory equipment, computers, etc  
   2. Sales forecast: This is considered as the most vital forecast requirement and it is very commonly used in the health industry. In fact sales forecast provides the ground for almost every type of expense projections. The different elements in this kind of forecasting will be  monthly or quarterly sales of various units, forecast of product sales, regional sales forecast, sales forecast on the dealer basis, discount scheme and any kind of proposed price changes or variations
   3. Expense forecast: The total cost in any organization can be divided into two categories namely fixed costs and variable costs.  The procurement and processing cost which is directly associated with the sales forecast is termed as variable cost while fixed cost can be seen  as salaries, insurances, rent and so on.
2. The expense and capital forecasting is generally not required at the short range level.  For estimating the variable workable in terms of short term forecasting, one has to observe the utilization of that variable within the coming quarter which is called quarterly forecasting.  When it comes to the short term sales forecasting, the various elements which will be covered are product wise sales in units , dealer and area wise sales predictions, discount schemes, any sales promotion offers

Capital forecasting can be seen as the prediction of the capital expenditure requirement of any organization for future. Example, new unit for a medical college or a new unit for a healthcare organization which is to be opened in the present year and it must be forecasting well in advance so that proper planning can be ensured. Example of fixed expenses are salary structure, rent, depreciation and so on and these will also be included in ters of long term forecasting.