Elementary Statstics

1.2.6 Prediction

Plans and policies of organizations are invariable formulated well in advance of the time of their implementation. A knowledge of future trends is very helpful in framing suitable policies and plans. Statistical methods provide helpful means of forecasting future events. For example, if a businessman has to decide how much he should produce in the next year, he would like to know the expected sales for that year. He may use his subjective judgement and make a guess. However, a better method for him would be to analyse the sales data of the past years or arrange a statistical survey of the market to obtain necessary data for estimating the sales volume for the next year.