Problems of using forecasting methods in business

Abstract

The complexity of the forecasting methods hinders their practical application in small and medium-sized enterprises. Aim of the paper- to prepare recommendations with respect to the selection of the forecasting methods that meet the needs of the management of small and medium- sized enterprises as well as to identify the reasons for the results and efficiency of their application. As a rule, forecasting is primarily carried out on the basis of past sales tendencies, as the principal dependencies and tendencies are expected to repeat themselves in the future. This does not always prove correct. However, such a forecast is valuable as the departure point for the planning process, which provides the initial objective data and stimulates the study of factors that influence the company's sales. In this respect, quantitative techniques are widely used. Subjective methods, such as survevs and team work, are also used for the purposes of forecasting, becuuse the evaluation provided by experienced professionals with a well-developed intuition frequently turns out to be more accurate than the mathematical processing of historical data.