Economics-For Managers

Forecasting plays a major role in decision making because forecasts are useful in improving the efficiency of the decision-making process. Businessmen use various qualitative and quantitative demand forecasting techniques to predict future demand for products and accordingly take business decisions. Qualitative techniques include expert opinion, survey and market experiments, whereas quantitative techniques include time series analysis and barometric method.

Businessmen can understand the changes taking place in the economy in a better fashion by undertaking economic forecasting. Risk and uncertainty are the two major components of the business decision-making process.

Risk is a condition where the businessman can measure the possible outcomes and losses arising from a certain decision. However, uncertainty arises when the risk involved in decision-making cannot be calculated by businessmen.