Manag., November-2017 – Q28
- A
Forecasting is based on a theoretical model while prediction may be based on intuition.
- B
Forecasting reflects management’s judgement after taking all available information into account; while prediction involves the projection of the past into the future.
- C
Error analysis is possible in the case of forecasting while no error analysis is done in the case of prediction.
- D
No objectivity is found in the case of prediction.
- Option : B
- Explanation :
Difference between Forecasting and Prediction
Sl. No. Forecasting Prediction 1 Forecasting involves the projection of the past into the future. Prediction reflects management’s judgement after taking all available information into account. 2 The forecast involves estimating the level of demand on the basis of factors that generated the demand. Prediction involves anticipated changes in the future that may or may not have generated that demand. 3 Forcasting is based on a theoretical model. Prediction may be based on intuition. 4 Forecasting is objective. Prediction can be biased. 5 The concept used in forecasting is the ‘throw ahead’ technique. Requires a pattern in data. The concept used in prediction is the ‘saying ahead’ technique. Can be used to predict from random data also. 6 Error analysis is possible. No error analysis. 7 Forecasting results are replicable. Prediction is based on unique representations.
