What is Business Forecasting?

Forecasting is, however, an attempt to predict that future. Forecasting involves taking historical data-that is data from past, such as sales figures for the previous three years -and projecting data into the future, using mathematical models(kruger ,Ramphal and Marit.2013:112).

Reasons for ineffective forecasting

  • An organisation fails to select an appropriate model (Kruger et al. 2013:121).
  • Management fails to recognise that forecasting must form an integral parts of the business (Kruger et al. 2013:121).
  • An organisation fails to monitor accuracy of the forecast.

    Therefore the organisation fails to improve the forecast (Kruger et al. 2013:122).

  • An organisation fails to involve all the relevant people in setting a forecast(kruger et al. 2013:122).
  • An organisation fails to recognise, from the beginning of the process, that the forecast will be wrong (Kruger et al. 2013:122).

Batch process

  • Are used to produce small quantities of products in the groups or batches based on customers order or product specifications.
  • The volume of each product produced are still small,and there can still be a high degree of customisation
  • Example can be seen in bakeries, education and printing shops

Line process

  • Are designed to produce a large volume of standardized products for mass production.

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  • They are also known as flow shop, flow line or assembly line(Dan Reid. R. Mada Sanders.R.2011:68)
  • With line processes the product that is produced is made in high volume with line or no customisation(Dan Reid. R. et al.2011:68)

Continuous flow process

  • operate continually to produce a high volume of a fully standardized product(Dan Reid.

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    R. et al. 2011:68)

  • the products produced by continuous process usually in continual rather than discret unit, such as liquid or gas.
  • they usually have a single input and limited number of output. Also these facilities are usually highly capital intensive and automated.

Transformed inputs

These are the resources that are treated, transformed and converted in the process

Transforming inputs

These are the resources which act upon the transformed inputs.

  • Mash tun
  • lauter tun
  • Machine

The operation manager must be experienced in the latest technology required to transform the barely seed into beer. He or she should ensure that the mash tun, a lauter tun and filter are maintained regularly. These can be achieved through implementing the correct maintainance programme.


  • The volume of particular product is produced during a specific measured time period.
  • This is known as high volume productions.
  • SAB produce high volume of beer during a specific time. e.g during December SAB produce high volume of beer.


The diversity is measured by number of model of particular product or service produced.

  • A characteristic is the fact that specialised equipment and staff are required.
  • SAB can produce different kind of beer in different kind of taste. By producing savanna and flying fish.

Introduction stage

  1. When a product or service is first introduced, it is likely to be offering, something new in term of its design or performance, with few competitors offering the same product or service (Slack. N and Brandom Jones. A. 2012:79).
  2. The need of customers are unlikely to be well understood, so operations management need to develop the flexibility to cope with any change and be able to give a quality to maintain product or service performance (slack. N. 2013:79).

Growth stage

  1. As volume grows, competitors may enter the growing market(Slack.N et al.2013:81).
  2. Rapid and dependable respond to demand will help to keep demand bought, while quality level must ensure that the company keep it’s shares of the market as competition starts to increase(Slack.N et al .2013:81).

Maturity stage

  1. Demand start to level off(Slack.N .2013:81).
  2. So operation will have expected to get the costs down in order to main profits or allow price cutting (Slack. N. 2013:81).

Decline stage

  1. After times, sales will decline with more competitors dropping out of the market (Slack. N. 2013:81).
  2. There might be a residual market, but unless a shortage of capacity develops the market will continue to be dominated by price competition (slacks. N. 2013:81)

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What is Business Forecasting?. (2019, Nov 15). Retrieved from https://studymoose.com/what-is-business-forecasting-essay

What is Business Forecasting?

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