Several factors can influence forecast accuracy, including:
Data Quality: Poor quality data leads to inaccurate forecasts. Clean and accurate data is essential. Forecasting Methods: The choice of forecasting technique can significantly impact accuracy. Techniques range from simple moving averages to complex machine learning models. Market Conditions: External factors such as economic conditions, competition, and consumer behavior can affect forecast accuracy. Time Horizon: Generally, forecasts become less accurate as the time horizon extends. Short-term forecasts are usually more reliable.