forecast

(noun)

An estimation of a future condition.

Related Terms

Examples of forecast in the following topics:

  • Demand Planning

    • HR forecasting is the process of ascertaining the net requirements for staff by determining present and future HR needs.
    • HR forecasting is the heart of the HR planning process.
    • The short-run forecast extends forward from the current forecast and states the HR requirements for the next one-to-two year period beyond the current operational requirements.
    • Typically, the medium-run forecast identifies requirements for two to five years into the future.
    • The long-run forecast extends five or more years ahead of the current operational period.

  • Financial Plan and Forecast

    • Most organizations prepare a revised forecast for the balance of the year, taking into account earlier budgets and forecasts.
    • Organizations may carry out a form of economic forecasting which is the process of making predictions about the economy.
    • Some forecasts are produced annually, but many are updated more frequently.
    • Managers like to develop forecasts of figures such as sales, costs, cash, profits, interest rates using different assumptions.
    • Another word for forecasts is scenarios.

  • Causes of the bullwhip effect and counteracting the bullwhip effect

    • The bullwhip effect is caused by demand forecast updating, order batching, price fluctuation, and rationing and gaming.
    • Demand forecast updating is done individually by all members of a supply chain.
    • Each member updates its own demand forecast based on orders received from its "downstream" customer.
    • The more members in the chain, the less these forecast updates reflect actual end-customer demand.
    • This behavior tends to add variability to quantities ordered and uncertainty to forecasts.

  • Cash flow forecasts

    • This is why cash flow forecasts are prepared.
    • What a cash flow forecast does is estimate cash inputs and outputs over a period of time, usually at least 90 days in order to give you assurance that your business will have the cash necessary to meet its obligations to others.
    • If the cash flow forecast shows, for example, that you are in a deficit position two months out, you will have time to raise the necessary cash you need and avoid a sudden cash crisis.
    • Cash flow forecasts are often prepared for longer periods of time as well, depending on circumstances.

  • Budgets, forecasts, and alternative scenarios

    • Earlier, we discussed cash flow forecasts and how they are used.
    • An extension of the cash flow forecast concept is the operating budget.
    • Most organizations take budget variance to date into consideration each month, and then prepare a revised budget (or forecast) for the balance of the year.
    • There are many other forecasts that managers ask for in order to try and anticipate what the future might hold so they can prepare contingency plans in case of unforeseen events.
    • Another word for such forecasts is scenarios.

  • Strategies for external relationships

    • It provided comparisons of sales and order forecasts of each trading partner and highlighted any visible forecast differences early enough for the partners to resolve any potential issues.
    • Warner-Lambert applied CPFR to the Listerine mouthwash products by sharing of forecasts and responding to inconsistencies between the collaboration partners' forecasts.
    • The partners shared this information, as well as the weekly forecast, and they worked together to resolve variations between their forecasts on a weekly basis.
    • The CPFR process model is divided into three phases: planning, forecasting, and replenishment.
    • Forecasting is the most important part of the model.

  • Day-to-Day Needs

    • Cash flow forecasting or cash flow management is a key aspect of the financial management of a business, because planning for future cash requirements can help to avoid a liquidity crisis in the business.
    • As a result, it is essential that management forecast (predict) what is going to happen to cash flow to make sure the business has enough to survive.

  • Inventory Management

    • Inventory management addresses a number of concerns, including: replenishment lead time; carrying costs of inventory; asset management; inventory forecasting; inventory valuation; inventory visibility; future inventory price forecasting; physical inventory; available physical space for inventory; quality management; replenishment; returns and defective goods; and demand forecasting.
    • Operational: Sourcing planning, including current inventory and forecast demand, done in collaboration with all suppliers; inbound operations, including transportation from suppliers and receiving inventory; outbound operations, including all fulfillment activities, warehousing, and transportation to customers; management of non-moving, short-dated inventory and avoidance of short-dated products.

  • Managerial Accounting

    • Financial accounting is generally historical, while managerial accounting is about forecasting.
    • Some simpler examples of common managerial accounting tasks include developing business metrics, cost-benefit analyses, IT cost transparency, life cycle cost analysis, strategic management advice, sales forecasting, geographically segmented reporting, and rate and volume analysis.

  • Profit Optimization

    • Reviewing historical sales records in the neighborhood, looking up the weather forecasts, noting the hours of highest traffic in the area and other factors that may affect sales can help determine how many ingredients to purchase and how much lemonade to make.
    • The models use market segment and price point to forecast total demand for all products or services they provide.