Forecasting Model Should A New Startup Company Use When They Have Insufficient Data

831 Words May 19th, 2016 4 Pages
This topic addressed various problems that arise in the business industry and how to resolve problems through choosing the appropriate forecasting model and techniques for a given situation. One major problem could be determining which forecasting model should a new startup company use when they have insufficient data. Another common problem that is faced by large companies involves separating out critical information from other irrelevant data to generate profitable forecasts. Also, deciding on what ways a company could produce short term forecasts when values of observation occur in an identifiable pattern.
Forecasting plays a fundamental role in the operations of a company because it informs the company what demand level, product lifecycle, or other events to expect and allow the company to prepare for these anticipated demands. Furthermore, forecasting techniques allow businesses to turn such information available from the database into strategies that could give a service a competitive advantage. Failure to produce an accurate forecast could lead to serious consequences. For example, if McDonald had chosen to underestimate customers ' demand for food, long lines would begin to form and McDonald 's service would appear to be inefficient and they might even lose a few customers. Similarly, if the customers ' demand were overestimated, it would result in unnecessary waste of resources and loss of profit. Fortunately, by choosing the right forecasting technique, we could…

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