Forecasting Forecasting (or prediction) refers to the process of generating future values of a particular variable (or variables) using some statistical procedure. Examples: 1. Within the firm Forecasting a. sales for the next 6 months. b. levels of inventories for the next 5 weeks. 2. The economy Forecasting a. the level of activity at the state or national levels. For instance, the unemployment rate, or the level of capacity utilization. b. the price of critical inputs (labor, fuel)