Should we forecast?


The importance of forecasting is really significant in improving the business. From our recent classes, I have learned how forecasting functions in business. It plays a critical role in meeting the needs in the consumers. Forecasting helps focus on what the consumer needs in the product or service, which is important for making product decisions and future planning. It also predicts the quantity needed to prepare beforehand to satisfy the consumers’ demands.

I read an article called “Holiday sales forecast to rise 4.1 percent this year”. This article is about the forecasting and statistics for the holiday months, November through December of 2012. The forecasting shows that people are less likely to splurge this year due the recovery of economic recession. Shoppers are worried about the rise of prices of goods and being unable to afford it, thus the decrease of splurging. By forecasting, retailers understand the needs of their consumers. Retailers made a lot of discounts during these months to encourage their consumers to shop. Forecasting also provides information how many consumers there will be. This information is provided with the prediction of the growth trend. It shows that it is significantly lower compared to the previous years. This information provides the retailers how much products they need in order to meet the demand.

How important do you think forecasting is in business?
Do you think it is necessary?

Article: Holiday sales forecast to rise 4.1 percent this year

10 thoughts on “Should we forecast?

  1. Forecasting is absolutely necessary because companies must identify and meet supply and demand of the consumers. Obviously, retailers do not want to have too much product on the shelf, but they do not want to have a shortage and lose willing buyers. It is really a balancing act. In this case, holiday shopping is likely to decrease because of the soft economy, however sales will remain strong because of discounts and attractive deals. This is a prime example of a retailer understanding that buyer confidence is low and people do not have the discretionary income, so prices have to be chopped. It is far better to make changes now and brace themselves for the sluggish holiday season, than to hope that customers will go out of their way and pend beyond their means. Forecasting is crucial for all businesses, but retail in particular.

  2. I completely agree that forecasting is necessary because you don’t want to make too much product and then have is lying around or have to sell it at a discount just to get rid of it.

    One perfect example where forecasting fell short was when the toddlers crying over the toy and annoyed parents rambling about how they NEED that toy. (

    Lastly I was just wondering why “Holiday sales forecast to rise 4.1 percent this year” but “people are less likely to splurge this year due the recovery of economic recession”. Just curious as to how the 4.1% came about.

    1. The 4.1% is the forecast of holiday sales between the months of November and December of 2012. The article stated that the forecast for the sales growth rate was significantly lower compared to the last two years. It was also the smallest growth rate since 2009 with an increase of 0.3%. This would predict that shoppers would be less likely to splurge because of the low growth rate of sales. I hope this answers your question.

  3. Forecasting plays a significant role in management. Both pricing and inventory management are factors influenced by forecasting. It is amazing how quick the holiday shopping season is approaching, and using forecasts are essential to how a business strategizes to maximize their revenues. With a sluggish holiday season in the near future, these forecasts forwarn the possibility of losses. Not only can forecasts be used for an overall demand prediciton, but they can also serve as a estimate for a specific product. For example, the tablet market is growing greatly and with the upcoming launch of a smaller iPad in order to compete with the similar sized tablets, forecasts for tablet demand will be essential for retail stores to stock an accurate amount on shelves and create an effective price. I am feeling a little more optimistic about this year’s holiday season especially with the demand for tablets and an array of options that offer several affordable products for any consumer.

  4. Forecasting is without a doubt necessary in any type of business. Without forecasting, businesses could potentially lose a lot of sales or spend too much on unnecessary inventory. Forecasting isn’t just useful for retailers to predict how much product to have on their shelves and back stock, it also helps with predicting the the volume of customers that will be present during the holiday season. With that information, forecasting helps hire new employees (seasonal workers) and staff more of the current employees as well. Forecasting plays numerous important roles in any business and in this article alone it has proven to be useful as well. If consumers are less likely to splurge this year during the holiday season then retailers need to know that information. With that, they can predict how much product to have and how much staff to have working. If forecasting wasn’t used then some retailers may just assume that they would need to order more products than actually needed or predicted to sell and they may have overstaffed/over hired workers. So in conclusion, as I’ve mentioned already, forecasting is vital in any business.

  5. I find this article very interesting since forecasting is something we directly talk about almost on a daily basis in class. I agree that forecasting is a huge part of not only improving a business but almost making sure it doesn’t fall below in its service quality. Forecasting is done not only for the company but also for the customer and that is a huge thing to consider when you are a company and you are forecasting for the inventory and demand for you products.

    The holidays will be here before we know it and i’m sure most companies have been forecasting for this holidays seasons demand. Most people think that stores need to forecast for higher demand of most of their products during the holiday season. Up until this year most years we saw a decrease in sales due to the economic crisis we were experiencing. As a consumer I can agree with this article and say that I will be increasing my buying during this holiday season. I am also worried about the rising costs of goods but that allows me to shop around and make sure that the purchases I do make this year fit within my budget. This will be an interesting year to watch the trends in consumers purchasing. On one hand many may spend more this year on gifts due to economic recovery while others may still be hesitant due to higher costs of goods. After the holiday season it will be interesting to see the statistics. As for companies forecasting this year will definitely be a challenge.

  6. I think that forecasting is very important for any business because by forecasting it helps your business from losing money. When you forecast you know how much you have sold and how much you have in stock then you will know how much you think you will sell and bring that much in instant of ordering extra that you will pay for and not be able to sell it. So I believe that forecasting for any business is important and that everyone should do that to have a better and more successful business.

  7. Not only if forecasting important in businesses but I think it might be one of its top priorities. Forecasting is crucial in business in order to keep the company growing. Forecasting is never easy. Just like the activity we did in class about the paper airplanes,where we were advise to ask the customers what they would like in a toy airplane. The same goes with pretty much any other company. In order to have a good forecast they need to know who is likely to buy or use their product and what they are going to get out of it. Collecting this information can help companies better their predictions.

  8. It is clear that forecasting is a vital part of our economies way of determining the future state of the market. We can also say, per what has been learned in class, that forecasting is instrumental in allowing producers to be better able to provide goods and services to consumers, by determining quantities put in to the market and inventory in addition to numerous other aspects that producers would be otherwise hard pressed to determine. As relates to holiday shopping prior to the recession the ten-year average for holiday sales was a 3.5 % increase. However following the recession as with all other times of year we have seen a great deal of loss in nearly all areas, it is projected that the holiday will be no different. However with producers becoming ever more innovative, with better technology and more accurate forecasting techniques it is likely the market will continue to rise and further cementing the significance of forecasting.

  9. I agree with previous comments 100%. Forecasting is absolutely necessary for a company to be successful. In order for their to be fufture growth within a company, it must predict how to deal with future positions. Such as, the future of an existing product line or one that is to be developed. Applying forecasting to holiday shopping is extremely critical. As stated in the article, if the recession predicts that holiday shoppers will be less likely to splurge during the holiday season then it would be smart for retail companies to promote items that are affordable to their average customer (the “average customer” could be determined by company retail history of customer previous customer purchases). For example, if the company noticed a trend of consumption for a particular product, they should place that product at the store forefront so it will attract buyer confidence of that purchase, thus increasing the company’s total revenue.

    As stated in a previous comment, I believe the tablet market is a great example. It would be smart for a retailer to promote the sales of a tablet such as the Kindle Fire which is low cost, high quality. As opposed to promoting the sale of an iPad, which is high cost, high quality. If a company were to do so, they could potentially see a rise in revenue if the consumer trends were showing that holiday shoppers are less likely to splurge. In the end, it is key to place the products of consumer interest right in front of the consumers.

Leave a Reply

Your email address will not be published. Required fields are marked *