Why is forecasting important in organizations especially as

Why is forecasting important in organizations, especially as related to understanding the relevant time horizon to develop a forecast against? What are some examples from industry? (Response in at least 200 words please)

(Wk4/DQ!)

Solution

Forecasting is important in organizations because they need to know how much do they need to produce in order to meet the forecast, they need to make sure they have enough raw material, employees and any other material involved on the production process. Purchasing department is involved on this process because they in charge of allocating these materials. Production managers are also responsible for the forecast because they need to plan the badges or lines or production to meet forecast.

Financial department needs to be aware of the forecast to make sure they have enough money to produce or buy the goods in order to keep the business running.

For example, most of the industries have their higher sales during Christmas time, that is no secret but the organizations don’t start producing these goods until December, most likely they will start producing on August and storing these products for the high season, production manager would be starting double shifts in advance in order to meet the forecast.