Accurate forecasting always has been a critical organizational capability for effective business planning. Good forecasts are essential for identifying new market opportunities, anticipating future demands, effectively scheduling production, and reducing inventories. Over the past few years, however, the role of forecasting has become especially significant due to more competitive market pressures. Information technology has enabled forecasts to drive entire supply chains and enterprise resources planning systems. Simultaneously, global competition has created an environment characterized by uncertainty, rapidly shifting markets, and compressed cycle times. Customers are demanding increasingly shorter response times, improved quality, and greater product choice. The result has been a sharp rise in forecast-ing's complexity and historical data that are often of limited value for predicting the future.
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