Chandigarh Group of Colleges,Jhanjeri

Master of Business Administration

MBA-II Semester

Business Analytics for Decision Making

Topic:-Meaning of forecasting and Business
Forecasting

CAMPUS: JHANJERI, MOHALI

 Objective

• The objective of this paper is to understanding of the

research process, tools and techniques in order to
facilitate managerial decision making.

Chandigarh Group of colleges,Jhanjeri

 MBA Batch 2018 onwards
MBA 201-18
Business Analytics for Decision Making
Unit I
• CO1: Explain fundamental concepts of data collection,
classification and tabulation. Understanding (Level2)

• Introduction to Statistics: Meaning, Importance, Applications of

inferential statistics in managerial decision making.
• Collection of Data: concept of primary data and secondary data, sources
of primary data and secondary data,
• Classification and Tabulation of Data: Concept and types of
classification, construction of frequency distributions, tabulation of data:
role of tabulation, parts of table, rules of tabulation, review of table, types
of table.
• Sampling: Concept, definitions, census and sampling, probability and non-
probability methods of sampling, relationship between sample size and
errors.
•
 Unit II

CO2: Outline the concepts of sampling and sampling

distribution . Understanding (Level2)
• Sampling Distributions: Concept and standard error.
• Hypothesis Testing: Formulation of hypothesis, procedure
of hypothesis testing, errors in testing of hypothesis, tests of
significance for large samples, tests of significance for small
samples, application of t-test, Z-test, F-test and Chi-square
test and Goodness of fit, ANOVA.

 Techniques of association of attributes.

 Unit-III

• CO3: Apply statistical methods for Hypothesis Testing.

Applying (level 3)
• Business Forecasting: Introduction, Role of forecasting
in business, Steps in forecasting and methods of
forecasting.
• Correlation: Partial and Multiple correlation.
• Regression Analysis: Multiple regression analysis,
Testing the assumptions of regression: multicolinearity,
heteroscedasticity and autocorrelation.
 Unit IV

• CO5: Make use of Index Number method in managerial

decision making. Applying (Level 3)
• Index Number: Definition, importance of index number in
managerial decision making, methods of construction, tests
of consistency, base shifting, splicing and deflation,
problems in construction.
• Time Series Analysis: Meaning, component and, methods of
time series analysis. Trend analysis: Least square method,
linear and non linear equations, applications of time series
in business decision making.
Course Outcomes: Upon completion of this course, students will be able to:

SNO DESCRIPTION BLOOM’S TAXONOMY

LEVEL
CO1 Explain fundamental concepts of data collection, classification and tabulation Understanding
(Level 2)
CO2 Outline the concepts of sampling and sampling distribution Understanding
(Level 2)
CO3 Apply statistical methods for Hypothesis Testing .Applying
(level 3)

CO4 Illustrate the concept of multiple correlation and multiple regression in business Understanding
forecasting (Level 2)
CO5 Make use of Index Number method in managerial decision making Applying (Level 3)

CO6 Apply the time series method to predict the future of sales in a concern. Applying
(level 3)

Chandigarh Group of colleges,Jhanjeri

 Unit-3

CO4:-Illustrate the concept of multiple correlation and

multiple regression in business forecasting

Partial Corrélation --Dr RAJINDER KAUR BHOGAL

 Learning Outcomes

• After completing this module the students will be able to

:-
• Introduction to Forecasting –Meaning, Definition
• Features of Forecasting
• Meaning of Business Forecasting
• Uses and Importance of Business forecasting
• Element and sources of data
• Methods of Forecasting
• Scientific Business Forecasting
• Techniques of Business Forecasting
• Conclusion
Chandigarh Group of colleges,Jhanjeri
UNIT-3
Forecasting
 Forecasting
• ‘Forecasts are predictions (or estimates) of any change in
economic phenomena which may affect business plans.’
[Mc Farland]
 Forecasting
• A ‘forecast’ is a prediction of what is going to happen as
a result of a given set of circumstances.
• The dictionary meaning of ‘forecast’ is ‘prediction,
provision against future, calculation of probable events,
foresight, provision’.
• In business sense it is defined as ‘the calculation of
probable events’. When estimates of future conditions
are made on a systematic basis the process is referred to
as forecasting and the figure or statement obtained is
known as a ‘forecast’.
Business Forecasting
 Business forecasting

• An act of predicting the future economic conditions on

the basis of past and present information.
• Refers to a technique to analyze the economic, social
and financial forces affecting the business with an object
of predicting future events.
• Business forecasting is the process of predicting future
developments in business based on analysis of trends in
past and present data.
 What is Business Forecasting?
• Business forecasting refers to the tools and techniques
used to predict developments in business, such as sales,
expenditures, and profits. The purpose of business
forecasting is to develop better strategies based on these
informed predictions. Past data is collected and analyzed
via quantitative or qualitative models so that patterns can
be identified and can direct demand planning, financial
operations, future production, and marketing operations.
 Use and Importance of business
forecasting
• Establishing a new business
• Formulating plans
• Estimating Financial needs
• Facilitating Managerial Decisions
• Quality of Management
• Encourages cooperation and Co-ordination
• Better utilization of Resources
• Success in Business
 Elements of Forecasting
• Developing the basis
• Estimating Future business operations
• Regulating Forecasts
• Reviewing the forecast process
 Sources of data used in Business
Forecasting
• Primary Sources:-First hand data collected personally
by the investigator.
• Secondary Sources:-Refers to already published data or
data collected by other agencies.
-Official reports of the Government
-Publications of reserve Bank of India
-Annual reports of the government
-Journals,newspapers..etc
 Role of Business Forecasting
• Basis of planning
• Promotion organization
• Facilitating co-ordination and control
• Success in Organization
 Steps in Business forecasting
• Developing the bias
• Estimating future business operations
• Regulating Forecasts
• Reviewing the forecasting process
 Methods of Forecasting
• Direct or Bottom –up Method
• Indirect or top down Method
• Historical method
• Deductive Method
• Joint opinion Method
• Scientific Business Forecasting
 Conclusion
• Business forecasting is the process of predicting future
developments in business based on analysis of trends in
past and present data.
 References/Text books
• Quantitative Techniques, by CR Kothari, Vikas
publication .
• Fundamentals of Statistics by SC Gupta Publisher Sultan
Chand .
• Quantitative Techniques in management by N.D. Vohra
Publisher: Tata McGraw hill.
• Business statistics T.R JAIN S.C AGGARWAL Global
Publication .
• Research Methodology CR Kothari
 Websites
• https://www.omnisci.com/technical-glossary/business-fo
recasting
 Topic to be Covered in the next
lecture
- Steps of Business Forecasting
- Demand Forecasting
Thank you