Forecasting sales, price, or product costs is critical to goal setting, strategizing, risk hedging, and other general planning activities. The three main techniques I use to predict future results are econometrics, time series analysis, and regression analysis.
Econometrics uses statistical and mathematical analysis of economic relationships, such as supply and demand functions for industries, business life cycles for products, and government policies, to predict outcomes.
Time Series Analysis looks at data that occurs in successive periods. Time series forecasts predicts future data points based on known past data points and is helpful with seasonality and frequency applications.
Regression Analysis calculates results of a dependent variable using known independent variable relationships. Other than forecasting, regression analysis can be used in hypothesis testing, causal relationship studies, and data validation. The strength of a regression formula can be communicated through basic descriptive statistics.