Business Reports - Essay Example

Running Head: BUSNESS REPORT ON BUSINESS FORECASTING Business Report on Business Forecasting Submitted by University Date Business Report on Business Forecasting Summary: The report presents different uses of business forecast and its adaptation to the function area that needs it. A business forecast can be prepared differently according to the needs of each section. Accordingly, a business forecast can help the sales, marketing, finance and production people to make budgets, projections of sales and production as well as to other major decisions for market positioning.

The importance of business forecasting is defined in the report such that it is recommended to be adapted by the company for short and medium term profitability. Introduction: The purpose of this paper is to present the study conducted on the necessity of business forecasting. Data has been gathered from several sources in the internet and journals to support findings of this report. Accordingly, business forecasting is a significant factor used as a basis of management’s decisions. Information derived from business forecast designs the operations of the business.

It can also correct the weaknesses of the company and strengthen further the lead points of the company. Discussions Chart below presents uses of business forecast and areas of the enterprise that require it. Different areas of the enterprise Uses and purposes of a business forecast Marketing people Determining point for introduction or discontinuation of products and services. Provides information on what market to enter or exit and the kind of products to promote Sales people Making sales plans and quotas as estimates for future sales Production managers Making production forecast, purchasing and logistics plan Financial managers Forecasting financial plans Source: “Why Forecasting?

” Institute of Business Forecasting and Planning As shown above, the different sections of the company have their own needs of a business forecast. Times 100 (n.d.) categorized business forecasting according to demand, supply, sales, production and advertising and promotion forecasts. Regardless of the purpose, Boulton (n.d.) argues that the general idea of a business forecast is to create short to medium sales and is done to look into profitability. On this, Baker (1999, p. 278-290) believes profitability depends on the accurate forecasts of costs and revenues, the confidence placed on the forecast and using the forecast in the business plan.

In our chart, the Finance needs a budget forecast in order to plan for the revenue and expenses. According to the study entitled “Benefits of Business Forecast” this system improves the accuracy of the budget preparation because it does not depend on the guessing game by simply changing the percentage of revenue and expenses. A business forecast examines why the expenses and revenue changed and use these evidences in estimating the “future value”. Business forecast also allows the marketing people to look at the external and internal environment that affects the positioning of the company.

The analysis gives the company an overall picture of the outside forces as well as the inner forces that influences its operations. (Benefits of a Business Forecast) In another concern, John Galt Glossary and Microstrategy (2011) article “Business Forecasting” stated that for a forecasting to be accurate, it should use statistical methods and data for reliable and concrete results and have suggested various methods in analysis. Moon, Mentzer & Smith (2003) gathered in a research study, comments of eight authoritative authors regarding forecasting methods wherein they confirmed the importance of how forecasting is conducted.

It was pointed out by these authors that lack of appropriate data, training of personnel and appropriate incentives could affect confidence of forecasting. Conclusion. Given the various purposes of business forecast, it is concluded that this model of business analysis has powerful estimation of predicting business exposure. My view of the basic intent of conducting a business forecast is to support decision makers in various areas of operation and at the same time establishing a data base of business intelligence.

Recommendation. In view of the highlighted importance of the business forecast to the business, a conduct of a business forecast is recommended to the company. It should encompass all areas of operation as each is integrated with each other, and overall operations are affected when one department is not functioning well. List of References Baker, Michael J. (1999). Sales forecasting. Published in the IEBM Encyclopedia of Marketing International Business Press. P. 278-290. Retrieved 22 September 2011 from http://www.

forecastingprinciples.com/paperpdf/Sales%20Forecasting%20from%20Encyc lopedia.pdf Boulton, Peter (2011) Approaches to sales forecasting - a review . Retrieved 23 Sept. 2011 http://www.dataperceptions.co.uk/forecastinginrealworld.php Benefits of a business forecast (n.d.). Business Performance Analysis.com. Retrieved 23 Sept. 2011 John Galt Glossary(2004.) Business Forecasting. Retrieved 23September 2011 from http://www.johngalt.com/business_forecasting.shtml MicroStrategy (2011). Definition: Business Forecasting.

Retrieved 23 September, 2011 http://www.microstrategy.com/business-forecasting/ Moon, M.A., Mentzer, J.T., & Smith, C.D. (2003). Researching sales forecasting practice: Commentaries and authors’ response on “Conducting a Sales Forecasting Audit”. International Journal of Forecasting 19 (2003) 27-42 Times 100. (n.d) Forecasting and business trends. Retrieved 23 September, 2011 http://www.thetimes100.co.uk/theory/theory--company--240.php#ixzz1YkQPVGio Why Forecasting? (n.d.). Institute of Business Forecasting and Planning.

Retrieved 22 Sept. 2011 http://www.ibf.org/index.cfm?fuseaction=showObjects&objectTypeID=87