Forecasting Management

Abstract: In a world that is moving faster and faster, a company’s ability to align to market changes is becoming a major competitive factor. Forecasting enables companies to predict what lies ahead, e.g. trend shifts or market turns, and makes it possible to plan for it. But looking into the future is never an easy task. “Prediction is very difficult, especially if it’s about the future.” (Niels Bohr, 1885-1962) However, progress in the field of forecasting has shown that it is possible for companies to improve on forecasting practices. This master thesis looks at the sales forecasting practices in MNCs primarily operating in emerging and developing countries. We examine the whole process of sales forecasting, also known as forecasting management, in order to develop a comprehensive model for forecasting in this type of companies. The research is based on a single case study, which is then later generalized into broader conclusions. The conclusion of this master thesis is that forecasting is a four-step exercise. The four stages we have identified are: Knowledge creation, knowledge transformation, knowledge use and feedback. In the course of these four stages a company’s sales forecast is developed, changed and used. By understanding how each stage works and what to focus on, companies will be able to improve their forecasting practices.