Types of business forecasting , Applied Statistics

Types  of business forecasting  are generally as follows:

1.      Sales  and Demand  forecasts

2.      Porduction  forecasts.

3.       Cost  Forecasts

4.       Financial  forecasts

5.      Profit  forecasts

6.       Other forecasts  Business , competition,, business   cycles, govt. Policies,  forecasting  about  consumers  income , interest, habit , fashion, preference, etc.

1.      Sales  and Demand  Forecasts

Sales  are directly  related  with business objectives  and demand  is related with sales  of goods  and series .Hence, a forecasting  is to be  conducted about  the  market demand of the product on the basis of given  facts and data  using  the statistical  methods for proper analysis  of   data  and facts. A businessman  is always  interested  to know  that what quantity  of his product will be demanded by the consumers at given  prices  during  the budget  period?  So that  he can make a necessary   arrangement  for production and sales.

2.      Production Forecasts:

Production  forecasting  is necessary  to achieve the  target of  proposed sales  during  the budget  period  so that  supply of goods  or services  may be possible . to  consumers  well in time .It should  be perfectness . Hence, with  the help   of forecasting    it is to  be  decided that What to produce, How to produce,  For whom to produce, when  to produce and What quantity is  to be produced during  the budget  period. Forecasting  replies  all these  question .At  the time  of production  forecasting  factors  are  to be  considered, like  the availability  of required and adequate raw  material and labour, production  technique  quantity of stock required , market  prices  business  condition etc.

3.      Cost Forecasts: After  the preparation  of production  budget  it is essential determine   its  projected  cost  so  that  financial arrangement  may  be made  well  time  as per  business requirement . Production  process  cannot  run smoothly without   proper expenditure  to be incurred for budgeted  production  which  should  be determined ,total  and per  unit both. Forecasting   about  production  costs  should  be definite   whether  direct  or indirect  to determine the price of product.  Costs forecast  considers the standard  and budget cost. Market  price  of factors  of production   market competition, availability  of factors  in the  market , production  techniques, organisation level etc.

4.      Financial forecasts

After  costs forecast  it is necessary to arrange the  required  funds to operate  the production  process during  the budget  period. Finance works like blood in  human body  or oil  in machines. Finance always  plays a dominant  role in business  because  without  finance  no economic  activity  can be  operated  in business . To keep continuity  in production  process  and to incur  the cost, financial  budget  should be prepared with the help of financial forecasting. The basis   objective   of a commercial  organisation is to earn maximum  profit. Hence, profit   forecasting   is essential. It shows  the amount of profit  to be earned during  the budgeted  period and  it is according  to target or not. It considers the   revenue   and cost budget  along with other  factors such as tax policy, dividend  policy etc.

5.      Other Forecasts:

Forecasting regarding  market conditions, business  fluctuations, government  policies, nature , habit, interest, preference  of the consumers. demonstration effect may also  be conducted  as per  the requirement  of business.

Posted Date: 9/27/2012 7:07:02 AM | Location : United States

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