The Concepts of Business Forecasting

The principles of business forecasting might be described as attempting to project past results into future estimates. This is simultaneously the strength and weakness of any technique, namely that it starts from established and quantifiable information but, in moving into the unknown future, by means of an extension of past conditions, it assumes that what was valid in the past will remain valid in the future. No matter how elegant the methods used are, the problem remains the same as that encountered before with statistical techniques, namely that the results can be no better in quality than the input — and input which depends on the assumption that the future is not going to be significantly different from the past can be somewhat questionable.