Production forecasting is the process of estimating the future demand of products and services. Some common problems typically associated with production forecasting is-
- Forecasting techniques are applied based on the concept of the causal system or cause and effect theory. Truth is, no one can guarantee that the past will be continuing to repeat in the future.
- Forecasts can never be exact and accurate because there is nothing in the future that is certain. In almost all cases, the actual result differs from the forecasting result.
- Forecasting for a group of products tend to be more correct than forecasting for a single product because of the canceling effect.
- Forecasting accuracy declines over time.
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