Quarterly forecasting updating revenue and expense models
From a strategic point of view, they should discuss whether the decision to be made on the basis of the forecast can be changed later, if they find the forecast was inaccurate.
If it This clarifies the relationships of interacting variables.
Here the manager and forecaster must weigh the cost of a more sophisticated and more expensive technique against potential savings in inventory costs.
Sound predictions of demands and trends are no longer luxury items, but a necessity, if managers are to cope with seasonality, sudden changes in demand levels, price-cutting maneuvers of the competition, strikes, and large swings of the economy.To handle the increasing variety and complexity of managerial forecasting problems, many forecasting techniques have been developed in recent years.Each has its special use, and care must be taken to select the correct technique for a particular application.Techniques vary in their costs, as well as in scope and accuracy.The manager must fix the level of inaccuracy he or she can tolerate—in other words, decide how his or her decision will vary, depending on the range of accuracy of the forecast.