Forecasting is not the same as planning, although a plan may be based on certain forecasts: for example, of some of the environmental factors discussed earlier. One of the by products of a plan may be a forecast of the results that will be attained if it is implemented. So forecasts may be both part of the raw material of planning and a manifestation of its outcome.
All forecasts deal with matters of uncertainty a point which has already been discussed and the more this uncertainty can be reduced, the better the chance a company has of planning the right decisions. Although we have already seen that too much stress on the accuracy of results may reduce the value of planning, the same cannot be said of environmental forecasts which cause the company to commit resources to achieve a particular plan. The method of forecasting may vary from a blind guess, through informed judgement, to the use of a more scientific approach. Some forecasting techniques are very complicated, and it is easy to fall into the trap of believing that complexity is beneficial for its own sake: simple methods may often be the most cost-effective.
Marshall the great English economist, had a word of sense to say about an approach to economics when in 1898 he wrote: It is doubtless true that much of this work has less need of elaborate scientific methods than of a shrewd mother wit, a sound sense of proportion and a large experience of life. The same might be said about approaches to forecasting.