[Solved] The three major types of forecasts used by business organiza (2024)

The correct answer isEconomic, technological, and demand.

Key PointsIn planning for the future of their operations, businesses rely on three types of forecasting. These include economic, technological, and demand forecasting.

Important Points

Types of forecasting:

1) Economic Forecast-

• By anticipating inflation rates, money supply, recession, infrastructure, housing, and other planning variables, economic forecasts address the business cycle.
• These forecasts can provide businesses with helpful information about the anticipated long- and intermediate-term business conditions and corporate growth.
• In addition, monetary and fiscal policies are taken into account while making economic forecasts.

2) Technological Forecast-

• Technical advancement rates, which may give rise to new items needing new facilities and machinery, are the focus of technological forecasts.
• Many firms benefit from technological advancements in terms of new materials and products to sell as well as new procedures to use, while others that have outmoded products and/or processes struggle to compete.
• For firms operating in rapidly evolving industries like computer technology, telecommunications services, etc., technology forecasts are crucial.

3) Demand Forecast-

• Forecasts of expected levels of demand for a company's goods or services are known as demand forecasts.
• The sales forecast is another name for these projections.
• Demand forecasts are crucial tools for decision-making in planning and monitoring.
• In actuality, estimates of the demand for goods and services serve as the overall management framework for operations.