“The process of making prediction about changing conditions and future events that may significantly affect the business of an organization.” (p.170).

The same authors (Bartol and Martin,1998) also point out that business activities like planning and decision making depend heavily in forecasting as they need good interpretation of future events(p.170).

Forecasting various methods are divided in two major categories, the subjective and the objective, which both are presented in Exhibit 1.

Choosing Between Forecasting Methods

Churchill et al (2000) point out that despite the many advantages and disadvantages (presented in Excibit1.1) that exist in any forecasting method and approach the final decision depends on the forecasting nature or in the method that have been used by other companies (p,135).

Exhibit 1 Classification of Forecasting Methods

Subjective methods:Users' expectationsSales force compositeJury of executive opinion Delphi technique Objective methods:Market testTime series analysis Moving aver

4. Useful for new or innovative products

sales effort 3. If estimates are biased, process to

3. Utilizes "collective wisdom1' of the 3. Disperses responsibility for the forecast

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