Forecasting MethodologyForecasting is an integral part of planning the financial future of any business and allows the business to consider the probabilities of current and future trends using data and of existing facts. Forecasting is essential to any business organization and important management decision. According to Armstrong (2001), forecasting forms the basis of long-term business planning. Often, this unique approach is used not only to provide a baseline, but also to offer a prediction about the future of the business. In the functional areas of finance and accounting, forecasts provide the basis for budget planning and cost control. Marketing relies on sales forecasts to plan new products, pay sales staff, and make other key decisions. Production and operations personnel use forecasts to make periodic decisions regarding process selection, capacity planning, and facility layout, as well as ongoing decisions regarding planning, scheduling, and inventory. production. Planning problems, whether for services or goods, can cause headaches for any manager that are easily solved by forecasting. It is important for every manager to realize that the past is the key to the future. Although no long-term plan is perfect, using the right forecasting tool, along with ongoing evaluation, allows the manager to review and update the company's financial plans. Most people perceive the world as being made up of a large number of alternatives. Futures research has evolved to examine alternative futures and identify the most likely ones. Forecasting is designed to help with decision making and planning in the present. Forecasts empower people because their use implies that we can change the variables now to change them (or be prepared...... middle of paper ......an excellent management tool that provides the necessary raw material to budgeting.Reference Chase, Jacobs, & Aquilano (2005). operations management. Global leader in economic and financial analysis, forecasting and market intelligence. Retrieved October 12, 2007 from http://www.globalinsight.com/Arsham Business. Forecasting. Retrieved October 10, 2007 from http://home.ubalt.edu/ntsbarsh/stat-data/Forecast.htm Armstrong J. Scott (ed.) (2001: A Handbook for Researchers and Practitioners). : Kluwer Academic Publishers.