Determination of Forecasting Techniques and Accuracy of Performance

This article explores the impact of the different forecasting methods (FMs) on the accuracy of performance forecasting (APF) in large manufacturing firms (LMFs), in Kenya. The objective of the study was to assess if the different forecasting methods have an influence on any of the aspects of measures of APF. APF, in manufacturing operations, is seldom derived accurately. However, LMFs tend to hire skilled forecasters, to a great extent, to ensure APF when preparing future budgets. The many forms of forecasting approaches have been found to influence operations behaviour, resulting in the formulation of either accurate or inaccurate forecasts, resulting in either negative or positive organisational performance. The study used the three known forecasting methods, objective, subjective and combined forecasting techniques against measures of APF, expected value, growth in market share, return on assets and return on sales. Regression analysis was used applying data collected through a structured questionnaire administered among randomly selected LMFs. Results indicated that there was evidence that APF is influenced by each of the forecasting methods in different ways. Researchers have also noted that there is no one foolproof and accurate way of forecasting as each forecasting technique influences APF in unique ways.