Question

What could result from a poor forecast?

Answer 1

Poor forecasting means inaccurately predictions of demand for future. This would lead to one of the two things :

1. Overstocking

2. Understocking

If demand is more than the forecast ,it would result in failure to meet demands which is due to understocking.

If stock levels are higher than the needed ,it would result in additional costs and even damage of goods if the goods are of perishable nature.

Either way ,the result would be a situation that company would wish to avoid in any circumstances. It is the same as running blind in a crowd ,but under the assumption that you know the path. Poor forecasting would eventually result in a situation where either the company incurrs huge costs, or the leaves the customer unsatisfied which is again unfavourable.