Forecasting can be broadly considered as a method or a technique for estimating many future aspects of a business or other operation. There are numerous techniques that can be used to accomplish the goal of forecasting. For example, a retailing firm that has been in business for 25 years can forecast its volume of sales in the coming year based on its experience over the 25-year period—such a forecasting technique bases the future forecast on the past data.

     

The term "forecasting" may appear to be rather technical, planning for the future is a critical aspect of managing any organization—business, nonprofit. The long-term success of any organization is closely tied to how well the management of the organization is able to foresee its future and to develop appropriate strategies to deal with likely future scenarios. Intuition, good judgment, and an awareness of how well the economy is doing may give the manager of a business firm a rough idea (or "feeling") of what is likely to happen in the future.

Nevertheless, it’s not easy to convert a feeling about the future into a precise and useful number, such as next year's sales volume or the raw material cost per unit of output. Forecasting methods can help estimate many such future aspects of a business operation. If the forecaster has an idea of what the real disposable income may be in the coming year, a forecast for future auto sales can be generated. One should remember that forecasts based on this method should also be judged on the basis of a measure of forecast errors. One can continue to assume that the forecaster uses the mean squares error discussed earlier. Using forecast, errors regression analysis uses additional ways of analyzing the effectiveness of the estimated regression line in forecasting.

These pictures are few ways that we get out forecast, now days it all technology!!!

http://www.ritholtz.com/blog/2010/02/forecasting-with-a-grain-of-salt/