All telecommunications service providers perform forecasting calculations to assist them in planning their networks.
[1] Accurate forecasting helps operators to make key investment decisions relating to product development and introduction, advertising, pricing etc., well in advance of product launch, which helps to ensure that the company will make a profit on a new venture and that capital is invested wisely.
[2] Forecasting can be conducted for many purposes, so it is important that the reason for performing the calculation is clearly defined and understood.
Removing outliers improves data integrity and increases the accuracy of the forecast.
They can be divided into different groups based on the theories according to which they were developed:[2] Judgment-based methods rely on the opinions and knowledge of people who have considerable experience in the area that the forecast is being conducted.
[2] Analogous methods can be split up into two groups namely:[2] Causal Models are the most accurate form of forecasting, and the most complex.
The advantage is that in most cases accuracy is increased; however a researcher must be careful that the disadvantages of each of the above methods do not combine to produce compound errors in forecasts.
[2] It is difficult to determine the accuracy of any forecast, as it represents an attempt to predict future events, which is always challenging.
A sensitivity analysis can also be useful, as it determines what will happen if some of the original data upon which the forecast was developed turned out to be wrong.