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Why forecasting is important to an organization

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Discuss why forecasting is important to an organization including a brief discussion of the six steps that an organization should follow when developing its forecasting model.What role does MAD play in evaluating a forecasting model?List and describe at least two time series models giving an example of the type of business that might find each of the models you discuss beneficial.Describe how you would develop a pro forma income statement (Table 6-7 in your textbook).What role does the pro forma balance sheet play in financial forecasting?Why is it important to have a budget to use as both a monitoring and control tool?Moving Average Forecast—Using the data in the table below, calculate a three-month moving average forecast for month 12. (table attached)Regression Forecast. Using the data in the table for questions #7 calculate the four items below. You may do this on your calculator or in Excel, however, please be sure to indicate the primary formula that you would use for each calculation. If you make your calculations in Excel be sure to export your work into Word before submitting your work to your mentor.What is the slope?What is the intercept?Write the regression equation.Calculate a regression forecast for month 25.Using the following balance sheet, create a pro forma sheet using the percentage of sales method. Assume income next year is $50,000. (attached below in two parts)Using the results from your pro forma balance sheet in question 9 answer the following:How much did the owners take out of the business?What is the profit margin for next year?
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  4. The forecasting department, traditionally reporting to the sale manager, has historically seen a forecast accuracy of about 60%, and this in turn causes problems for the following departments: Purchasing: What should we buy and how much? Production: What should we really build? Inventory management: We keep building the wrong thing. The sales manager asked you to write her a memo, specifically addressing the following: -How could you suggest that your new system would achieve any better levels of forecast accuracy? -Why is forecast accuracy itself not as important under traditional methods?