Read The Future

Can anyone really read the future? We all know that this is not true but what I shall talk about relates to the subject hugely.


We learned a bit about forecasting, its importance to organizations and some of the different methodologies used, should those be qualitative or quantitative. I work as a business analyst and my company is in entertainment and events management and I am going to go briefly on how we utilize forecasting in our business.


We learned that applying forecasting techniques is easy once you know which method to choose. In my company we have a mixture of products. Some of which existed for years, some have been renovated and others will be introduced in the near future.


For products that have been in the market for a while we utilize the historical data to recognize patterns on evenly spaced periods. By looking at the growth rates and applying a moving average method we have been able to project demand and sales figures fairly.


With regards to renovated products we look at the elements our clients liked and move the product into that direction. The only way to get our hands on such information is by doing consumer market surveys. Make sure before you go ahead with the process that your sample represents your entire market. We have been in a situation where we projected huge revenues from a recently changed product. What went wrong is that the proposed changed came from a key client, a change the rest of our clients did not like and we ended up changing the product back.


The hardest of all in my opinion is forecasting a new product. I have learned from experience that the best estimates will always have a large percentage of error in this case. If you forecast less and the demand is more, you end up losing clients. If you forecast high and you end up not selling much then you have wasted resources that could have been better utilized elsewhere. What we do is that we relate the new product to another that has similar characteristics. Surprisingly, similar products will have similar market trends and growth rates. If it is a product we have no similar to we seek information from other companies, business professionals and the internet to utilize the best forecasting techniques.


Two things my company does after each forecast. One is we will do manual adjustments to the results. I know from the class that this step is the sales force composite. We will ask the heads of the department about what they think about the numbers. May be they have large number of clients lined up to buy or may be our biggest purchaser is not interested in buying anymore. The second is to look at the state of the economy and how other companies are doing and estimate their spending.


Which is the best forecasting technique? It all depends to me.


14 thoughts on “Read The Future

  1. I agree that forecasting techniques vary between one company and another. Every company has different products or services and therefore they will use a forecasting technique based on what suits their business best. I also agree with your statement regarding forecasting new products. It certainly is the most difficult forecasting to do since there it is no prior experience, but it’s good to know that at the company you work for, you have certain tactics that you use in order to get a more accurate forecast of your new products.

    1. Thank you so much Dana for your comment.

      I would to add that my company is in the search for a suitable Business Intelligence system (BI) in order to fully utilize the data we have on our CRM, Accounting and VM applications.

  2. I found your post interesting. I believe working in the entertainment industry with various demographics – it becomes very difficult for you to ‘naively’ forecast how many people will show up at your events or what kind of product to design. historical data may be beneficial but i feel that alot of the events you hold are also based on social trends, especially in a small country like Bahrain. therefore i think it is very essential for you to find the right forecasting tool that will be able to capture all different variables.

    1. You are totally right Nada. It is tricky to predict the volumes and their relevant market segments. The least I can tell you about the process that it is challenging.

  3. I agree … It depends !
    your business field, past performance, future plans, products, competitors, seasons and special occasions will all contribute to what is the best  forecasting method.
    in my company, we do a monthly forecasting of our expected sales and revenue. Depending on the available data, sometimes we use trend projections method, and sometimes we use moving average method. 
    Next month, when we get the actual figures, we compare the actuals against our forecasts and identify the difference, i.e. forecast error. 
    For me, justifying the difference is very critical, because we have to report those figures to the higher management and they need to understand the whole story.
    I wish to find a new forecasting method that would would read the future 100% correct under all conditions for all products.

    1. Thanks Bashayer,
      Recognizing and identifying variations is very important to enhance the process of reporting and forecasting.
      I have seen though few companies pay attention to variations only when they are below expectations and if they are above the tend to ignore them. The best practice will be to analyse and recognize the reasons in both cases.

  4. I very much agree with you. The method of forcasting used really depends on the type of products. In the automobile industry, we face the same situation. For forcasting for existing cars, we use past data in forcasting the demand. However, forcasting for a new car, especially one that is in a totally different segment is quite hard, since we have no prior data. Therefore, we research the market for products in similar segment and study its market share and its acceptance in our market. Based on an extensive study, forcasting for the new product is done.

    1. Thank you Nariman,
      I just wonder if you do incorporate demographical data and population growth rates in your research. Some purchasing behaviours are distinctive and highly predictable. A 40 years old married guy with a big family will tend to buy an SUV versus someone who is 20 years old will tend to buy a sporty car.

  5. I totally agree with you Mahmood, it depends, and on many factors.

    I once worked for a credit card company, and forecasting was a big slice of our work whenever we needed to develop a new product and launch it. I was lucky to work on the development and launch of the same card in 5 different countries. Same product, but 5 different markets. Forecasting depended big time on the differences in each country’s culture, political situation, climate – yes believe it or not, weather made a difference in the forecast although the product was just a credit card!!! Change in the competitors behavior also had a big impact on our forecasting, so you will also need to predict the reaction of your competitors while doing your own forecasting.

    1. Hi Nada,
      I find the statistics and the patterns under the credit card purchases are the most fascinating.
      Just to illustrate your point further, in some parts of the world you would not expect anyone not to have a credit card because it is used instead of cash. Should that be because a credit card could be swapped anywhere or because the credit facilities are so attractive or because of other reasons. In other parts of the world a credit card is just a ‘B’ plan to be used when no other financing option is available. I find that culture is the biggest driving factor given how it affects our habits including purchasing behaviours.

  6. As learned from class it depends, such situations as you mentioned in your post must be forecasted using different methods, to me the trick is to use the proper forecast for each situation, because at the end each forecast will give you an answer but you have to pick up the correct answer in order to have a proper analysis of the market.

    1. Hi Mohammed,
      What my company does sometimes is that we present the different scenarios from each forecasting method to the management and they choose the one they find most applicable based on their experience.

  7. I agree with Nariman, the type of forecasting usually depends on the industry you are looking at.

    I work in fashion retail and forecasting can be really tricky because trends can change literally overnight. A certain event, what a celebrity is wearing, what someone tweets, can make or break sales.

    Of course no forecasting is 100% accurate and that is why manual adjustments must be considered as you said. Even then, it will not be a 100% accurate.

    I think companies need to be well equipped in case their forecasts go wrong. In our previous course in MIS, we saw how fashion retailer Zara’s strength came in its ability to respond to on-the-spot demand for products in a highly flexible manner.

    If a company is so flexible, does it mean that they do not need to rely so much on forecasting but more so on their ability and speed to REACT?

  8. Hi Noor,
    I totally believe that the field of fashion is so fragile that almost anything could affect it. Having a solid and well-known brand might help in having your sales figures stable to some degree.
    A company being flexible is key but even that might come short if you had a huge investment in a product that nobody wants to buy.

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