What are the key differences between long-term and short-term forecasting?

What are the key differences between long-term and short-term forecasting?

Long-term forecasting focuses on predicting outcomes over an extended period, often years, while short-term forecasting looks at immediate future trends, usually within a year.

Can you give examples of when to use each type?

Sure! Long-term forecasting is useful for strategic planning, like market expansion, while short-term forecasting is ideal for inventory management or sales projections.

What methods are commonly used for each type?

For long-term forecasting, methods like trend analysis and scenario planning are common. Short-term forecasting often uses time series analysis and moving averages.

How do economic factors influence these forecasts?

Economic factors like inflation, interest rates, and consumer behavior can significantly impact both types of forecasting, affecting accuracy and reliability.