Business Forecasting and Planning: A Comprehensive Literature Review

This report provides a literature review on the role of forecasting and planning in business organizations, highlighting their importance in achieving strategic goals and maintaining a competitive advantage. It discusses how management integrates these functions to coordinate activities, optimize resource utilization, and adapt to external environmental changes. The review covers various methodologies for effective planning and forecasting, including the use of technology and data analysis, while also addressing potential drawbacks such as time consumption and accuracy limitations. Ultimately, the report concludes that while planning and forecasting require significant investment, they are crucial for informed decision-making, enhanced customer satisfaction, and sustained organizational growth, emphasizing the need for managers to carefully weigh the benefits against the challenges.

SKILLS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Literature review..........................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Management is a process of coordinating and administration of task, activities so that the
desired goals can be easily achieved. Manager is an important individual that perform all task
starting from planning, organizing, staffing, controlling and coordinating range of people for
attainment of company objectives. This report has consisted of literature review related to role
of forecasting and planning in business organization. Thus it will help in identifying the way
manager plan for the future circumstances so that company can achieve and retained competitive
advantages in external environment.
MAIN BODY
Literature review
As per specify by Ittner and Michels (2017), management is one of the most important
function of the company as it helps in integrating, coordinating and organising things or
activities so that last objective can be attained. Planning and forecasting are two side of coin that
helps in successful operation of business in external environment. Among them planning is an
on-going process such as checking the current activities, identifying the mistakes and finding
alternative method that could be used to resolve the problem. Furthermore, author specified that
planning helps company in reaching the final goals or nearest future as all the things are
considered for achieving the set objective. Thus, management plays a crucial role in mapping
out activities or goals that company needs to achieve during a particular year through taking
steps and making best use of available resources for benefits of firm.
According to Park and Mithas (2020), manager is solely responsible for planning key
activities, set of procedure that needs to be undertaken by the firm during a specific time frame
so that company can enjoy high profit and market share. Likewise, the manager through
devoting more time and efforts in planning activities, steps that needs to be taken so that firm
can make optimum use of available opportunities and overcome the existing threat. It collects
the data related to what is happening in currently in order to find what are suitable growth option
or challenges so that effective strategies are plan to face the situation. Along with it provide
clear action plan, delegate task, roles and responsibilities that needs to be completed by
particular individuals. Thus, it helps in eradicating the chance of confusion and conflict thereby
helping in coordinating people and activities to work for attainment of end goals.
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From the point of view of Hill, Zhang and Miller (2018), forecasting is another aspect that
plays significant role in business organisation as it helps in looking into the future
circumstances. Through noting the available resources, estimating or identified its future
requirements so that appropriate strategies can be plan to make best use of them for growth and
expansion of firm. Forecasting helps company in knowing about the current situation or
circumstances of external environment such as change in policies, technology and customers
taste and preferences. Thereby helps company in planning its strategies as per the same to cope
with the current situation and retain its market positioning. Such as manager through making use
of internet are able to know about change in policies and procedure that might impact business.
Thus, through changing the strategy accordingly firm can have strong brand image in mind and
hearts of millions of customers.
Another author named Jaiswal (2018), further supported the same through making use of
example such as forecasting has contributed organisation in understanding that there will be
drastic change in the technology i.,e use of social media or internet to connect with people. So
most of the organisation has plan set of action to adapt the digital market with an motivate to
sustain in market for longer time frame. Moreover, there is another examples: with increase in
number of disease, customers are preferring to have more organic products to have safe, healthy
lifestyle. Thus, company have started introducing organic food range and herbal products so that
customers wants can be fulfilled and it can adapt itself as per the future scenario. Therefore, all
these changes as per external environment has acts as opportunity for firm and lead in their
growth in international market.
As specify by the Peters-Hawkins, Reed and Kingsberry (2018), there are various method
that an company make use to effectively plan and forecast the future. Such as use of internet,
information technology, monitoring changes that are happening in external environment and
many more. For examples: there are firm that make use of information technology to gather,
analysis and interpret what are changes that are happening and the way it acts as threat or
opportunity for the firm. Thus, furthermore it has helped in planning better strategies that could
be adapted by organisation to have high profit margin and sales volume.
As per view of Aydiner and et.al., (2019), there are positive impact of planning and
forecasting such as it helps in more effectively scheduling the overall production or making use
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of available resources so that maximum value can be delivered to customers in minimum time
frame. Company through planning and forecasting, the direction it needs to follow, or the
manner in can reduce wastage and maximum production is able to yield more benefits to firm.
Or contribute in meeting the customer demand in limited time possible so that they can be happy
and satisfied. In addition to this, it has also clarified that planning and forecasting also contribute
in inventory management as manager is able to find resources that are require in future
circumstances thus arrange the same for smooth operation of firm.
Furthermore, Kettunen and Laanti (2017), explained that it also results in reducing the
overall cost or expense of the company as through planning it follows the right path, direction as
well as it helps in effective prediction of what actually customer wants. Thereby it helps
company in avoiding the unnecessary inventory so that products or high output can be gain in
minimum cost and resources possible. Planning and forecasting also helps in enhancing the
customer satisfaction level through offering them right products at right time so that its needs
can be meet and it can be motivated to be part of the organisation. Thus, from the point of view
of author, company through devoting its time in planning and forecasting can easily attract
millions of customers in the firm.
On the other hand, Argenti (2018), there are some negative impact of the planning and
forecasting that need to be understand by the firm to have competitive positioning in new
market. Such as it is more time consuming and resources intensive process as for forecasting, the
manager need to have lot of data to take decision about what will happen in near future and
strategies that may be used by the firm. So, more cost as well as time has to be used by the
company to make appropriate planning and forecasting for benefits of company. Secondly, the
author has stated that forecasting and planning may be not be 100% accurate as there may be
chance that it may not be perfect. Therefore, these are major two negative impact or
disadvantages of planning and forecasting for the company.
CONCLUSION
From the above report it can be concluded that management is the wide process that start
from planning and end at controlling and monitoring so that firm can easily achieve its set
objective. Company can easily gain competitive advantages or strong brand image through
effective planning and forecasting. Furthermore, it has been learned that planning and
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forecasting are time and resources consuming process but they help in making best use of
available opportunities and eradicating the associated threat. At last it can be summarised, that
the manager needs to consider the disadvantages or negative impact of it while performing its
task for growth and expansion of firm.
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REFERENCES
Books and Journals
Argenti, J., 2018. Practical corporate planning. Routledge.
Aydiner, A. S and et.al., 2019. Business analytics and firm performance: The mediating role of
business process performance. Journal of business research, 96. pp.228-237.
Hill, C. A., Zhang, G. P. and Miller, K. E., 2018. Collaborative planning, forecasting, and
replenishment & firm performance: An empirical evaluation. International journal of
production economics, 196. pp.12-23.
Ittner, C. D. and Michels, J., 2017. Risk-based forecasting and planning and management
earnings forecasts. Review of Accounting Studies, 22(3). pp.1005-1047.
Jaiswal, M., 2018. Big Data concept and imposts in business. Manishaben Jaiswal'Big Data
Concept and Imposts in Business' International Journal of Advanced and Innovative
Research (IJAIR) ISSN, pp.2278-7844.
Kettunen, P. and Laanti, M., 2017. Future software organizations–agile goals and
roles. European Journal of Futures Research, 5(1). pp.1-15.
Park, Y. and Mithas, S., 2020. Organized Complexity of Digital Business Strategy: A
Configurational Perspective. MIS Quarterly, 44(1).
Peters-Hawkins, A. L., Reed, L. C. and Kingsberry, F., 2018. Dynamic leadership succession:
Strengthening urban principal succession planning. Urban Education, 53(1). pp.26-54.
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