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Forecasting in accounting refers to the process of using current and historic cost data to predict future costs. Forecasting is important for planning purposes – it is necessary to estimate and plan for costs that will be incurred prior to actually incurring them.What are the four basic types of forecasting?
There are four basic types of forecasting methods: qualitative, time series analysis, causal relationships, and simulation. Qualitative techniques are subjective or judgmental and based on estimates and opinions (Chase, 2005).What are the steps in forecasting process?
The stages or steps in a production forecasting process are listed as follows: Fix the forecasting objectives. Decide what to forecast? Determine the time frame. Collect the data for forecasting. Select the forecasting model. Build and test the forecasting model. Prepare the forecasts.