Forecasting in a business setting is usually done in support of planning activities and generally come under 3 types.

Operational Forecasting – This type of forecasting is done for timelines that fall within the next few days or weeks, sometimes hour by hour or even day by day. They are generally done for short term operational scheduling for customer service, carrying out inventory management, warehousing well as the transportation sector,

Tactical Forecasting – This type of forecasting is carried out for time periods that cover several months or quarters and up to several years. It is carried out for tactical planning for the sales, marketing, production, distribution, and labor planning sectors.

Strategic Forecasting – This type of forecasting is done to support strategic planning and are carried out for timelines that occur over many years. They are most often applied to the business planning and investment as well as capital planning sectors.

There are 4 general techniques used to effect forecasting in businesses. These are Time series, Life Cycle, Causal and Judgmental. The Time series method uses only historical data to predict the future and is considered the least effective of the four techniques. “Of these types, Time Series is the least useful for strategic forecasting because in long term a market can change drastically due to a variety of factors, including changing demographics, economics, consumer preferences and world events.” (Lapide, 2002). Causal method uses econometric methods and requires that a model of demand be built. This entails using some historical data to be able to build the demand model that can explain what happened historically and replicate historical demand patterns. Life Cycle techniques use a cumulative demand curve such as the “S” Curve to predict the future. These are best used for carrying out long term forecasting about new products and technologies, when very little or no historical demand data exists. The curves are obtained from analyzing the demand for similar products and inform on how these products behaved over time. Judgmental uses research methods that gather qualitative and quantitative data on the market size and the speed at which the market adopts new products, concepts, and technologies. “Judgement methods are useful for the long-term demand forecasting of products that have no demand history and cannot be compared to products that have come before it.” (Lapide, 2002).

 

One prediction that has come true was given by futurist John Naisbitt in 1982. In this prediction he stated that biology and medicine would rise above electronics. He wrote that “Biology is replacing physics as the dominant metaphor of society. The next twenty years will be the age of biology in the way that the last twenty years have been the age of microelectronics.”  (Asghar, Rob). One of the main forces that has driven the growth in biological technologies is the mapping of the human genome sequence completed in 2003. That fact can be tied directly to the creation of the techniques used to fast pace the creation of the vaccines of covid-19. Another technology that has enabled biological science to be a driving force in present times is gene editing technologies like CRISPR. Clustered regularly interspaced short palindromic repeats (CRISPR) is a technology that allows scientists to precisely modify/edit the DNA of living organisms.

References: -

Asghar, Rob (October 3, 2013). https://www.forbes.com/sites/robasghar/2013/10/03/5-business-and-tech-predictions-that-turned-out-right/?sh=32dbf0e47953

Lapide, L. (2002). New developments in business forecasting. The Journal of Business Forecasting Methods & Systems, 21(1), 12-14. 

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