Problem
Last year, the analysts responsible for forecasting sales at PlastiPharm forecasted an increase of 10 percent for the year. They used historical records as well as past economic growth rates to determine the forecast, but it was too low - by 8 percent. Why should the forecasters even bother to estimate if their predictions could still be off? Choose the best explanation.
1. Forecasting is still worth the effort because the company needs to at least try to predict what their needs will be.
2. Forecasting allows the company to set a baseline and then constantly evaluate to improve their process and reduce forecast error.
3. Determining an acceptable percentage of forecast error will allow the company to identify improvements to the business to make up for forecast errors.
4. If the company does not place too much confidence in the forecast, it will be better able to adapt and change as needed. Which one?