ABSTRACT
In this chapter, the authors explain what forecasting is, how it is different from planning and analytics, and what the main forecasting principles are. All these aspects will help the people not to fail in trying to predict the future. Forecasting is a vital activity carried out by many organisations, some of which do it unconsciously or label it as “demand planning” or “predictive analytics”. In some cases, accurate forecasts might be wasted if people make decisions differently and/or do not trust what they see. Finally, in practice, not all issues can be resolved with forecasting. In some cases, companies can make decisions based on other reasons. Point forecast is the most often produced type of forecast. It corresponds to a trajectory from a model. Although geometric mean makes sense in many contexts, it is more difficult to explain than the arithmetic one to decision makers.
