An analysis of the value of business forecasting in corporate decision making.
This paper examines how business forecasting is a valuable tool in aiding businesses to make both long-term and short-term business decisions. It looks at how both qualitative and quantitative methods of forecasting can be highly effective, especially when applied to the correct business environment and practice. It also shows that, while many methods, including the much-used Delphi and time series methods of forecasting, are flawed, they also can provide valuable data.
“In this small business, more formalized methods of forecasting would not be financially viable. The cost of obtaining a Delphi analysis would far outweigh the benefits to the business. Nonetheless, the owners may be able to benefit from an industry-wide quantitative analysis of the future market for car repairs. This analysis would allow the owners to track industry changes in car repair sales. Further, an industry-wide analysis of the type of repairs, and the models of cars repaired may help this small business to predict the type of future repairs, and thus run their business accordingly.”