Long term forecasting

Forecasting time horizon can be defined on three categories: short-term, medium-term and long-term.

Long-term forecasts involve purely strategic decision for a time period of about 5-10 years, so the forecasting processes need to cater to these requirements. For example, an organization may be interested in projecting the future technology trends in their business and use it as the basis for developing new products, production technology, and human and other resources.

Confidence in statistical forecasting is dependent upon the time frames for forecasting and the nature of the information being forecast.

Short-term forecast are generally are accurate in policy analysis than are long-term forecasts. Different disciplines permit greater long-range forecasting than others.

Limitation for long-term forecasting horizon – in most cases the available time series forecasting methods are unreliable over a long time span.
Long term forecasting