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Forecasting 101: A Beginner’s Guide
Forecasting is a crucial tool in business and finance, enabling organizations to anticipate and prepare for future trends and changes in the market. In this article, we’ll explore the different types of forecasting methods, their strengths and weaknesses, and provide 12 principles of effective forecasting.
What is Forecasting?
Forecasting involves using historical data to identify patterns and trends, and then extrapolating those patterns into the future. This can be done using a variety of methods, including statistical models, machine learning algorithms, and expert judgment. The goal of forecasting is to provide a basis for decision-making, whether it’s in business, finance, or other fields.
Types of Forecasting Methods
There are two main types of forecasting methods: quantitative and qualitative.
Quantitative Method: These methods rely on numerical data and statistical models to predict future outcomes. They’re particularly useful for short- to medium-term forecasts where historical data is available and patterns can be discerned. Examples of quantitative methods include time…
