In researching forecasting within a business some of the information has proven to be very helpful in determining what the future holds for the business or company. Some of the concepts this paper will cover has to deal with indexes and the different types of indexes that are involved with any type of business. With any business forecasting the future trends are important because these charts show the trends over a period of years based on the averages. All company’s have forecasting to meet the goals and objectives within the business. Rating systems can also be viewed as an index but require certain factor’s in particular rating systems. There is a variety of index’s throughout the business world some of them consist of the Dow Jones Industrial Average, the Consumer Price Index, and the Consumer Confidence Index.
Forecasting is a process in which, business’s make statements about the events where the actual outcome has typically not been observed. Business’s tend to make forecasting apart of the business because it sets out goals and objectives for them to achieve. Without forecasting the business would not have any type of goals or objectives to reach therefore, the business would not know what to predict for the upcoming years or months. Forecasting is done in a variety of ways and tells different types of information based on the business. The chosen forecasting for this project was the Winter and Summer Highs for a period of four years. Based on the information that was given the forecasting of these two items fluctuated throughout the years. Estimation of the future goals of the business would allow them to achieve success. For example, the current company that I work for right now uses forecasting to determine the amount of sales that they will do during each of the two shifts. Even though forecasting is just an estimation of the sales that they will possibly do it is a goal that they work towards. The Dow Jones Industrial Average (DJIA) is a well-publicized index that reflects the value of stock prices (Sevilla, 2007).
In reading the text about rating index’s this type of index can be considered as a type of indexing scheme. These types of rating index’s are set up for company’s to compare movies, colleges, cities, or other institutions. When consumer’s buy movies the company will rate how popular the movies are depending on the demand of the product. Movies are rated on the content of those movies and placed in the following categories: PG, PG-13, R, NC-17, or G. Rating index’s can also be used to organize places, or things based on the amount of traffic a certain place has had over the past year or compared to earlier years. This could be used to base the future’s popularity of certain places around the world. In order for a business to use the rating system indexes appropriately, the business needs to consider the information that is included in the rating as well as the reliability of the information. We encounter rating systems when various organizations rate, for example, the best cities for walking or the best “family-friendly” companies (Sevilla, 2007)..
The charts show how the time series data of indices fluctuates by decreasing and increasing steadily of the months, and years. Throughout these years the information that has been provided shows that the fluctuation over these years will more than likely continue. During the fifth and ninth months is when the summer highs were at their peak. Then in the tenth month it dropped considerably with a slight peak in month eleven and then back down at the twelve month. During the winter highs the fluctuation begins at the beginning of the year and has the highest peak during the eleventh and twelfth month. The winter highs started off with a high peak and tapered off throughout the upcoming months. Looking at the information it looks like the last two months of the year were the best time for the winter highs.
In conclusion, by looking at the market prices, trends, and forecasting business’s can set out goals, and objectives. Predictions and outcomes are different and sometimes those goals and objectives are not met. But with any business these figures are not set in stone and can be changed to meet the future trends, and market prices. Forecasting is a way to forecast or predict what the company or business will do during the year, or months. There is no guarantee that that the number’s that have been projected will be matched. Forecasting with indexes is a excellent way to make sure that demands are being met throughout the business.
Sevilla, A., & Somers, K. (2007). Quantitative reasoning: Tools for today’s informed citizen (1st ed.). Emeryville, CA: Key College Publishing.