The longer the time frame you need to plan for using forecasts, the more important the precision of these become for the company’s performance. This also means that it might be necessary to prepare various forecasts with different time frames for the same product, which may create a substantial need for coordination.
However, in many companies the individual departments prepare the forecasts for that particular department’s use. This typically means that there is more than one forecast per product in the company, thus increasing the risk that Production uses a forecast that is in direct conflict with the one Procurement uses.
All requirements for time frame and precision must be formulated and communicated clearly. The time frame a forecast should cover is naturally delimited by how long before the arrival of an order the company needs to allocate resources to be able to meet the order.