Business Forecasting
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Business Forecasting
Cathy Clark
University of Phoenix
February 8, 2010
Preparation to handle business demands as they arise can give an organization the competitive edge in the industry. Accurate forecasting abilities are the key to proper preparation to handle the demand. Many systems in an organization depend on an accurate forecast like the annual budget, staffing needs, materials sourcing, and capacity planning. This paper will show how data collected from a simple daily shower will help predict the time needed for future showers and how variability can be measured and used to identify weaknesses in a process.
Business forecasting has evolved from primarily estimating using common sense and personal experience to more recently using electronic data analysis. “Business forecasting involves a wide range of tools, including simple electronic spreadsheets; enterprise resource planning (ERP) and electronic data interchange (EDI) networks, advanced supply chain management systems, and other Web-enabled technologies. The practice attempts to pinpoint key factors in business production and extrapolate from given data sets to produce accurate projections for future costs, revenues, and opportunities. This normally is done with an eye toward adjusting current and near-future business practices to take maximum advantage of expectations” (ecommerce, 2010). With the rapidly changing business environment that prevails currently, it is essential that data is collected and processed in a timely manner to be used in everyday business decisions or it becomes obsolete and worthless before it can even be used. Some methods used in developing forecasts are described in the textbook, Operations Management for Competitive Advantage by Chase, Jacobs, and Aquilano are: qualitative, time series analysis, casual relationships and simulations.
Understanding forecasting and data analysis will require an understanding of some data analysis terms such as...
Cathy Clark
University of Phoenix
February 8, 2010
Preparation to handle business demands as they arise can give an organization the competitive edge in the industry. Accurate forecasting abilities are the key to proper preparation to handle the demand. Many systems in an organization depend on an accurate forecast like the annual budget, staffing needs, materials sourcing, and capacity planning. This paper will show how data collected from a simple daily shower will help predict the time needed for future showers and how variability can be measured and used to identify weaknesses in a process.
Business forecasting has evolved from primarily estimating using common sense and personal experience to more recently using electronic data analysis. “Business forecasting involves a wide range of tools, including simple electronic spreadsheets; enterprise resource planning (ERP) and electronic data interchange (EDI) networks, advanced supply chain management systems, and other Web-enabled technologies. The practice attempts to pinpoint key factors in business production and extrapolate from given data sets to produce accurate projections for future costs, revenues, and opportunities. This normally is done with an eye toward adjusting current and near-future business practices to take maximum advantage of expectations” (ecommerce, 2010). With the rapidly changing business environment that prevails currently, it is essential that data is collected and processed in a timely manner to be used in everyday business decisions or it becomes obsolete and worthless before it can even be used. Some methods used in developing forecasts are described in the textbook, Operations Management for Competitive Advantage by Chase, Jacobs, and Aquilano are: qualitative, time series analysis, casual relationships and simulations.
Understanding forecasting and data analysis will require an understanding of some data analysis terms such as...