A financial forecast is an estimate of future financial outcomes for a company, and it’s an integral part of the annual budget process. Importance of Resource Forecasting. Demand forecasting uses data and analytics to predict as precisely as possible the customer demand for a specific period in order to satisfy customers, minimize inventory costs and optimize cash flow. This is necessary for sound planning. Therefore, managers have to balance the cost of forecasting with its benefits. Why is Forecasting Important? Forecasting uses many statistical techniques. 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Demand forecasting is vital to the management of every business. Posted by Jesse Kelber on November 07, 2019 Tweet; Of all the stages of the supply chain, logistics often gets a bad rap. ƒCompetition and speed of development increased the importance lately - wrong decisions cost more and more ƒForecasting the future and success go pretty much hand-in-hand - good forecast is easy to use, reliable, accurate, timely and meaningful Human resource planning based on a calculative forecasting can improve operational efficiency and increase the profitability of a business. "Importance Of Forecasting In Operations Management" Essays and Research Papers . Many small firms don't do forecasting because of the high cost. 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It gives confidence to the managers for making important decisions. This task is fundamental, crucially important to running a business smoothly and making sound operational decisions, and notoriously difficult to perform accurately. And in 2001, Nike also had Demand forecasting importance for demand forecasting software implementation failure that led to a $100 million loss in sales. 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