PURPOSE OF FORECASTING: Purposes of short-term forecasting: Appropriate production scheduling so as to avoid the problem of over-production & the problem

m of short-supply. Helping the firm to reducing costs of purchasing raw materials. Determining appropriate price policy. Setting sales targets & establishing controls & incentives. Evolving a suitable advertising & promotion programme. Forecasting short-term financial requirements.

PURPOSES OF LONG-TERM FORECASTING: Planning of a new unit or expansion of an existing unit. A multi-product firm must ascertain not only the total demand situation, but also the demand for different items separately. Planning long-term financial requirements. As planning for raising funds requires considerable advance notice, long term sales forecasting are quite essential to assess long-term financial requirements. Planning man-power requirements. Training & personnel development are long-term propositions, taking considerable time to complete.