[Source](https://pixabay.com/illustrations/chart-graph-analytic-cubes-bars-1545734/)
In forecasting, a number, combination of numbers, or scenario that correlates to a future event is created. Both short-term and long-term planning definitely require it. A forecast is by definition predicated on historical data, as opposed to a prediction, which is more arbitrary and predicated on intuition, gut feeling, or guesswork. For instance, the weather is "forecasted" rather than "predicted" on the nightly news. Forecasts should not be confused with predictions because they are based on visible and verifiable data and patterns rather than purely conjectural ones. Forecasts that are properly constructed should be able to account for seasonal influences as well as blips that result from one-time spread causes. Spreadsheets can be used to forecast the future and analyze historical trends.
1. The past will come to pass again. Thus, what has occurred in the past will continue to occur in the future.
2. Prediction accuracy rises as the forecast horizon gets shorter. For instance, a forecast for tomorrow will be more accurate than a forecast for next month, a forecast for next year will be more accurate than a forecast for ten years in the future, and so on.
3. Aggregate forecasting is more accurate than predicting for a single item. As a result, a company will be better able to predict overall demand over the full range of its products than it would be able to predict specific stock-keeping units.
For instance, General Motors can predict the entire number of vehicles required for the following year more precisely than it can the total number of white Chevrolet Impalas with a specific option package.
4. Although some forecasts are extremely near, forecasts are rarely precise and virtually never completely accurate. So it seems sense to provide a projected "range." It is quite unlikely that demand will perfectly match a forecasted demand of 100,000 units for the upcoming month. A projection of 90,000 to 110,000 would, however, provide planners a far broader objective to work with.
Bye...
Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@anna89/forecasting-explanation)
hiveblocks