Question

What are the limitation of Environmental analysis ?

Answer 1

Environmental analysis, particularly the forecasting part, suffers from several limitations :

Based on Assumptions: All forecasts are based on certain assumptions which may not always be true. The basic assumption behind forecasting is that events do not change haphazardly and there is an orderly pattern in their behavior. This assumption may not hold good in all cases. As a result forecast may become unreliable.

Not Absolute Truth: Forecasts merely indicate the trend of future events and may not be fully true. The various technique of forecasting simply project the future trends and cannot guarantee that a particular trend will occur in future. All forecasts are wrong, they only differ in the degree of error. There is always a possibility of mistake.

Time-consuming and Expensive: Lot of time and money are involved in the collection, analysis and interpretation of data for forecasting. Therefore, forecasting is useful only to the extent that benefits expected from it exceed the time and cost involved.