Forecasts are predictions about the future, and thus are destined to be wrong.  The real challenge is to make them as accurate as possible.  That means having a forecasting process, and knowledgeable people who are  in touch with customers and the marketplace, to feed the best, most up-to-date information into that forecasting process.  The final ingredient is to have sources of market information that “inform” the forecasters' conclusions.

Statistical estimates are good, but educated, informed, statistical forecasts are even better.

There are several things that can be forecast with reasonable accuracy:

• How fast can suppliers and producers respond—and with how much inventory—to an unexpected surge in demand?

• How quickly and gracefully can they cut back if the forecast was too optimistic?

• How long does it take to staff up and train a service organization for a surge in demand?