Essence of Forecasting in the three thrust of an organization namely:

Economy, Quality and Quantity.

Forecasting is a process of making estimates of the occurrence, timing or

magnitude of uncertain future events. Forecasts serve as guide for manager to
make good decisions in their company. It is used to help in making decisions
regarding the quality of the products/services they offer to their customers/clients,
the quantity of products/services to be produced/provided, and in the distribution
and consumption of these products/services which refers to the economy.

For example, if you forecast the right quantity of raw materials for a certain
product, therefore you will be able to achieve the desired quality of output which
will in turn result to increase in sales. Similarly, if you could forecast the demand
for a certain product, then the operations function of the company will be guided in
determining the right amount of goods/services to be produced/provided.
Additionally, if you could project the sales for a given product/service in a given
period, you will be guided in making decisions on the production of your
products/services.
Therefore, forecasting is an indispensable tool for managers in making the
best decisions in their company. It is a tool which is very necessary in running
every organization. It serves as a guide in making decisions and predicting the
possible outcome of their activities.