Telecommunications Forecasting - Why Is Forecasting Used?

Why Is Forecasting Used?

Forecasting can be conducted for many purposes, so it is important that the reason for performing the calculation is clearly defined and understood. Some common reasons for forecasting include:

• Planning and Budgeting – Using forecast data can help network planners decide how much equipment to purchase and where to place it to ensure optimum management of traffic loads.
• Evaluation – Forecasting can help management decide if decisions that have been made will be to the advantage or detriment of the company.
• Verification – As new forecast data becomes available it is necessary to check whether new forecasts confirm the outcomes predicted by the old forecasts.

Knowing the purpose of the forecast will help to answer additional questions such as the following:

• What is being forecast? – events, trends, variables, technology
• Level of focus – focus on a single product or a whole line, focus on a single company or the entire industry
• How often is forecasting conducted? – daily, weekly, monthly, annually
• Do the methods used reflect the decisions needed to be taken by management?
• What are the resources available to make decisions? – lead-time, staff, relevant data, budget, etc.
• What are the types of errors that could occur and what will they cost the company?