which of the following is a basic consideration of forecasting? my course hero

Why is forecasting important in planning?

As planning involves the future, no successful plan can be made unless the manager can take all possible future events into consideration. And without planning the structure of any organization will collapse. This is why forecasting is crucial in the planning process. In fact, each and every decision taken in the organization depends on forecasting.

How does forecasting help in overcoming uncertainties?

The risk majorly depends on the future happenings and forecasting can help in overcoming these happenings by preparing in advance for the uncertainties. It cannot check the future happenings but can provide clues for the same and indicates when the action can be taken and in which situation.

What is a barometer?

Business Barometers: The barometer is a device used to measure atmospheric pressure. In similar context index numbers are used to measure the state of the economy between two or more periods. These index numbers are the basis to study various trends, seasonal fluctuations, cyclical movement, and irregular fluctuations.

How does time and cost affect forecasting?

Time and cost in fact also affects forecasting. It tells the extent to which an organization will go for formal forecasting. The data may be in a highly disorganized form or in qualitative form. Forecasting is a great tool for any organization to use and adapt according to the needs and objectives of the organization.

How can economic conditions be predicted?

The economic conditions of any country can be predicted by comparing it with that of the advanced countries at a particular stage that the country is currently passing through. Also, if something is invented in any part of the world, it is only used by the other countries only after a gap of a certain time period.

What is the purpose of past and present events?

The past and present events act as a basis for forecasting. The analysis may require statistical and mathematical tools and techniques. It helps in mapping the progress of the company in various scenarios over a period of time.

Why is regression analysis used?

This is used to find the change that happens in a variable because of the change that takes place in another variable. In economic and business situations, a number of factors affect the functioning of the business simultaneously. Regression analysis helps in detaching the effects of such factors to a large extent.