Statistical Forecasting - Applications of Forecasting

Applications of Forecasting

The process of climate change and increasing energy prices has led to the usage of Egain Forecasting of buildings. The method uses forecasting to reduce the energy needed to heat the building, thus reducing the emission of greenhouse gases. Forecasting is used in the practice of Customer Demand Planning in every day business forecasting for manufacturing companies. Forecasting has also been used to predict the development of conflict situations. Experts in forecasting perform research that use empirical results to gauge the effectiveness of certain forecasting models. Research has shown that there is little difference between the accuracy of forecasts performed by experts knowledgeable of the conflict situation of interest and that performed by individuals who knew much less.

Similarly, experts in some studies argue that role thinking does not contribute to the accuracy of the forecast. The discipline of demand planning, also sometimes referred to as supply chain forecasting, embraces both statistical forecasting and a consensus process. An important, albeit often ignored aspect of forecasting, is the relationship it holds with planning. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like. There is no single right forecasting method to use. Selection of a method should be based on your objectives and your conditions (data etc.). A good place to find a method, is by visiting a selection tree. An example of a selection tree can be found here. Forecasting has application in many situations:

  • Supply chain management - Forecasting can be used in Supply Chain Management to make sure that the right product is at the right place at the right time. Accurate forecasting will help retailers reduce excess inventory and therefore increase profit margin. Studies have shown that extrapolations are the least accurate, while company earnings forecasts are the most reliable. Accurate forecasting will also help them meet consumer demand.
  • Economic forecasting
  • Earthquake prediction
  • Egain Forecasting
  • Land use forecasting
  • Player and team performance in sports
  • Political Forecasting
  • Product forecasting
  • Sales Forecasting
  • Technology forecasting
  • Telecommunications forecasting
  • Transport planning and Transportation forecasting
  • Weather forecasting, Flood forecasting and Meteorology

Read more about this topic:  Statistical Forecasting