forecasting

Forecasting refers to predicting future trends of business operations, socio-organizational behavior, economic markets, and policy-making. Forecasting aids business managers in strategizing for sales, adjusting resources, and other future scenarios. Forecasting utilizes a variety of data and methods such as economic variables, statistical techniques, and consumer or public surveys.

Qualitative Methods of Forecasting

Qualitative methods of forecasting are most often used when historical data is unavailable and rely on expert judgments. Examples include the Delphi Method, Scenario Writing Method, and Subjective Approach Method.

Delphi Method:

The Delphi method is also called the group consensus method and typically involves a panel of experts from various backgrounds who answer questionnaires until they reach a general consensus.

Scenario Writing Method:

In the scenario writing method, a forecaster will develop several future scenarios based on different assumptions that the business will then use to decide which scenario is most likely to occur.

Subjective Approach Method:

The subject approach method relies on the feelings, ideas, and personal experiences of the forecasters to make predictions. The forecasters may be employees and executives of a business as part of a “brainstorming session,” or exclusively include the salespeople of the business under the “grassroots approach.”

Quantitative Methods of Forecasting

Quantitative methods are used for forecasting when historical data is available and is based on the date of specific variables of interest. The two common methods are the time series and causal method.

Time Series:

The time series method relies on a specific variable’s past trend in order to forecast future trends of the variable.

Causal Method:

The causal method analyzes the “cause-and-effect” relationships of several variables, such as interest rates and disposable income.

[Last reviewed in March of 2026 by the Wex Definitions Team]

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