Now, the next question we have to address is this who does forecasting and how it is used by entities
forecasting is performed in nearly every organization that works with quantifiable data.
For example, retail stores forecast sales.
They use data of consumers past purchases and try to predict these sales forecasts for coming days.
This can help them in managing the inventory level of different products, update pricing, et cetera.
Similarly, energy companies forecast reserves, production, demand and prices.
Forecasts of reserves are used to determine long term investment plans, whereas demand forecasts are
used for short term production planning and competitive pricing.
Government forecasts, tax receipts and spending every year.
Governments produce the budget based on estimated values of tax, which will be collected in the coming
year.
And the plans for the expenditure accordingly.
Banks and lending institutions forecast new home purchases, and venture capital firms forecast market
potential to evaluate business plans and not just domestic banks.
International financial organizations such as World Bank and International Monetary Fund forecast inflation
and economic activity.
In agriculture, various government organizations are involved in predicting the weather.
Demand for several crops.
Production of several crops, etc..
Now take a moment and think how other industries such as education, travel, stock market traders,
etc, are using time to these forecasting.
I guess you can also imagine how nearly every industry is trying to forecast some variable in the future
to be better prepared today.
Now let's see the process in all in forecasting.