What method allows businesses to forecast future performance based on historical data?

Time series analysis is a statistical technique that enables businesses to predict future performance by analyzing historical data over a certain period. This method looks for patterns or trends in the data, such as seasonality or cyclical movements, which can help to create forecasts that assume that the past trends will continue into the future.

Using time series analysis, businesses can make informed decisions based on observed data patterns, thereby enhancing their ability to allocate resources effectively and strategize for upcoming periods. This approach contrasts with other methods, such as qualitative analysis, which relies on subjective judgment and insights rather than numerical data, and market analysis, which focuses more on external factors affecting the market rather than past performance data. Additionally, expert judgment is based on the insights of experienced individuals, which may not always rely on historical trends but more on personal opinions and insights.