Several factors influence forecasting accuracy, including data quality, forecasting methods, and external variables:
Data Quality: The accuracy of a forecast is highly dependent on the quality of the data used. Inaccurate or incomplete data can lead to erroneous predictions. Forecasting Methods: Different methods, such as quantitative and qualitative approaches, have varying degrees of accuracy. Choosing the appropriate method is crucial. External Variables: Economic conditions, market trends, and unforeseen events (e.g., natural disasters, political instability) can all impact forecasting accuracy.