APPLICATION OF FORECASTING METHODS WITHIN THE DEPARTMENT OF DEFENCE

Transcription

1 APPLICATION OF FORECASTING METHODS WITHIN THE DEPARTMENT OF DEFENCE Prof. Dipl. Eng. Ladislav BUŘITA, PhD. Annotation: The author in his paper focused on relations of prognostics with management at the strategic level, with human thinking and scienti c and research activities. The paper deals with the concept and contents of prognostics, systematization of methods, techniques and procedures. Further, it addresses the methods of qualitative and quantitative, passive, active and normative forecasting; Delphi Panel and Brainstorming; Truth of Forecasts. 1. INTRODUCTION The article is based on the study Survey of Prognostic Method used for Management of Science, Defense Research, Development and Technologies in the Czech Republic developed by the Institute of Strategic Studies (ISS) of the Military Academy in Brno (MA) in 2001 as the grant project. Forecasting is a discipline relating to management activities especially at the strategic level (concept considerations and decision making data), and it is connected with human thinking (prediction, visions) and with scienti c and research activities (study about the future). Forecasting is a complex interdisciplinary activity. 60-ies up to 80-ies was golden age of forecasting. In this time, especially in the Western part of formerly divided world as well as based on the government initiative due to the cold war, forecasting was purposefully developed and fostered. Many workshops, symposia and working meetings were held and systematic acquisition of data on forecasting methods was carried out. As a member of the Czech Republic military personnel I was surprised, as it happened many times in other areas that the U.S. DoD was always in the center of interest of progress in forecasting and as the main user of forecasting services. In the former Czechoslovakia, forecasting was the domain of the economic universities and especially of the Institute of Future of the Academy of Science. 47

2 DEFENCE AND STRATEGY 2. CONCEPT OF FORECASTING Where the incentives for forecasting originate? Who requires forecasts and where are they needed? Incentives for forecasting result from execution of the state power, from economic activities, transportation, protection of environment, technology,, simply from anywhere where exists an effort to know the future development and purposefully in uence it. While any important decision has impact on the future that is why they are accompanied with information uncertainty and information insecurity. Especially in situation of permanently changing conditions. Standing impetus for generation of forecasts is an effort to eliminate or mitigate the uncertainty for future with respect to our present behavior. What is a suitable issue for a forecast? These can be plans, budgets, projects, results of research and their application, acquisition processes, status and in uence of environment in the area of market and nances, industry, food production, technological development, reserves of natural resources, social environment, mechanisms of management, military science, etc. It is required to be able to systematically forecast, to acquire long-term general overview, to monitor main trends or their cyclic nature. The objective of forecasting is gathering of knowledge, experience and visions of future acquired by rational procedures and logical thinking. Forecasting studies solution of tasks and process of thinking about the future, it corrects intuitive forecasts, analyses the importance of vision of future as the grounds for behavior and decisions made by people. Forecasting considers future as objectively potential, probable, not utopian. Future is understood as a system of events and processes that may occur in certain time and under certain conditions. The subject of forecast can be illustrated as characteristics of development and changes. Forecast conceives development as a tendency, trend or ongoing process; change (as the cause of development) as the events of being effected phenomenon. Study of future should provide guideline for optimum behavior of people. Forecast is systematically derived and in terms of reliability evaluated utterance about future status of events that is to take place under certain conditions and usually in certain time. It usually covers a set of alternative potentialities of future and variants of ways how to achieve them. Contrary to a simple prediction it was necessarily arrived to at by application of forecasting methods, based on controlled activity, by taking the best of scienti c knowledge. Forecasting brings visions, presumptions and models of future yet not existing (it may cover more forecasts of the same topic or their alternatives of future development). Provided such hypothesis of future developed by rational processes, using exact method then we may speak than about the forecast. Forecast can be included fully in the vision of future, or it can be included in it in combination with intuitive predication or it may not cover it at all. 48

3 Forecasting is a systematic study of future and formulation of scienti c statements on potential variants of development. It is not theoretical activity taking place in isolation but it is connected with general scienti c cognition stemming from knowledge about the past, it is devoted to re-shaping of present on the basis of appraisal of possibilities and needs of the future. In the social practice, forecasting becomes a part of process of management and planning. Scienti c level of forecasts is based on their completeness, complexity, multidiscipline character and clearness. Forecasting can play an important role in the decision-making processes. With certain degree of simplicity if we identify three stages of decision-making process than forecasting methods and procedures can used in each of the below mentioned processes: 1. Formulating the problem we are to decide - to which corresponds an information activity of the decision maker. 2. Identi cation of potential ways to take the decision - to which corresponds a constructive activity of the decision maker. 3. Selection of a certain path - to this corresponds an alternative activity of a decision maker. Effectiveness of forecast is a relationship between bene ts and costs for its generation. The effects can be expressed as impact of results of forecasting activity in their application. They are traceable from the function of forecast (information, analytic, synthetic, ). Costs ensue in individual phases of forecasting activity (analysis, creation, putting into practice, ). The effects of forecasts are evaluated based on appraisal of characteristics of their informative values (reliability, accuracy, completeness, ). The value of forecast for the users consists of informative contents (Why?, How?, What?) and knowledge (explanation of future reality) contents. To be able to achieve such state, it is necessary to know the user need of forecast - to identify the diagnosis of the user and recommend a procedure of forecast generation. Function of forecasting: v Knowledge and informative function through forecasting we acquire new knowledge on future phenomena and processes, their clear and visual representation for the users facilitates communication between the representatives of various areas (management, administration, science, civic movements, ). It also includes promotion of results of forecasting practice. v Heuristic function focusing and encouragement of development of scienti c work by orienting it to non traditional and yet non addressed problems. v Analytic function analysis and explanation of causes of development, interdisciplinary relations; de-composition of complex processes and phenomena into subprocesses, identi cation of their characteristics. v Synthesizing function integration of forecasts and interpretation of effects of sub-processes and phenomena on the development of society. v Evaluation function weight of evaluation criteria on individual variants of fore- 49

4 DEFENCE AND STRATEGY cast, explanation of optimum proportion between possibilities and targets of the object of the forecast. v Interpretation function interpretation of requirements and conditions of application of forecast in practice. v Normative function deriving of actual standards of behavior and variant objectives from the strategy of future development. The forecast-projected objectives are compared with appropriate implementation measures. After approval, they became a part of normative documents (plans, procedures, projects, schedules). v Explorative function focus on measures that will lead to tailoring against the forecast-foreseen consequences of development. v Implementation function transfer of forecasts into the social practice. v Regulation and warning function purposeful activity envisages not only awareness of requirements of the established targets but also resources and methods how to accomplish them. Regulation is based on necessary understanding of potential consequences of realized activities. Prognostic practice has interactive character; it requires exchange of knowledge between forecaster and the user of forecasts. Detailed and accurately established objectives of the user practice are the necessary prerequisite, without understanding of these objectives the applicable forecast will not be achieved. Prognostic practice, continually involved into the strategy of social life can contribute to stabilization of strategic decisions. In general, each decision lacks an adequate forecast. The more important the decision will be, the larger should be the scope of the forecast. 3. SYSTEMATIZATION OF FORECASTING AND FORECASTS Basic methods of prediction are qualitative and quantitative predictions. From a number of qualitative methods highlighted should be the method of Delphi panel and from the quantitative - the extrapolation method with the use of time-series. Basic types of prediction in terms of hypothetical part are passive, active and normative forecasts. To create the passive forecast, extrapolation method is a suitable procedure. Active forecasts then will be linked with the analysis of objectives, modeling and development of scenarios of future. Normative forecast are derived from the desired future goals. The important phase of forecasting is an analysis of the subject of forecast. Based on the results of analysis, the forecast can be solved as explorative (research), normative (objective) in global scope or for the local needs. Forecasts can be classi ed according to the object, time, target, extent, complexity, and degree of determinate aspect. From the time viewpoint the forecast can be divided into short-term, medium-term and long-term forecasts. The expertise method is the most signi cant one from the forecasting methods. Brainstorming, Delphi Panel, morphology analysis, gaming methods and scenarios of 50

5 future are some of these methods. In forecasting practice can be applied mathematical models (extrapolation transcription of projection), graphical and diagram (tree of signi cance, tree of objectives), simulation and procedures, or exact (logically expressed procedure), heuristic (identi cation of new paths), system procedures. 4. DESIRED FORECASTS FOR TOP MANAGEMENT OF THE STATE ADMINISTRATION Characteristics of potential users will also determine the contents of processed forecasts: v Development of security risks for the Czech Republic, assumed action to eliminate them. v State and development of resources to support the defense (personnel, material, manufacturing programs and capabilities, scienti c and research potential). v Strategic concept of defense and its coping the security risks, resources to ensure the defense and proposed measures. v Does the development of the armed forces corresponds to the strategic concept of defense? (professional regular armed forces, strength and structure, priority of the build-up and budget, etc.). v Budget and its ef cient use in ensuring the defense. v Science, research and development, industrial potential for the bene t of defense. v Does the preparation of the armed forces meet the strategic goals of defense? The own procedures in preparing the forecasts can be drafted in the stage of preforecast analysis, identi cation of the user strategy and creation of its organizational model. Pre-forecast analysis should: v Identify the strategy of behavior of the user. v Identify where in the learning loop there are uncertainties for the user (where he lacks the information?). v Identify what will be the focus of forecasting analyses. To identify the strategy of the user behavior requires: v Map its objectives and their relationship. v Determine the criteria to evaluate the objectives. v Assess the individual objectives in the strategy of behavior. v Represent the strategy using a model. The organizational model of potential user, identi cation of its targets assumes knowledge of its behavior, speci cation of objective function. Model of institutional reality (i.e. analysis of objectives) ensues from studying the plans, programs, concepts, intentions, competencies, missions, and their relationship. 51

6 DEFENCE AND STRATEGY 5. SURVEY OF FORECASTING METHODS, TECHNIQUES, MODELS AND PROCEDURES To have an awareness of a number of forecasting methods, techniques, procedures and models is a very dif cult task. It is because there are many disciplines that affect forecasting and in practical forecasting activity methods, techniques, procedures and models in individual phases of preparation and creation of forecast they mutually impact and complement each other. It is evident that preparation, generation and explanation of forecast is based on study of events in reality and their analysis, with rational re ections and judgments resulting in accordance with the found assumptions. Forecasting requires acquisition and adjustment of data from which using the calculation procedures the information on future is acquired. Forecasting procedures facilitate construction of formula and sets of equations, i.e. mathematical model for simulation as well as forecasting procedures use and process the expert opinions. The forecasting methods shall be applied speci cally for a given area, not schematically and the best is to use combination of more methods. In the solution of forecast itself we take into account methodology, information and communication characteristics. By forecast methodology we understand procedures of cognition activity, use of set of mutually supplemental methods and procedures. It depends on possibilities, capabilities and needs of forecasting. In forecasting practice we often encounter several methodologies that have the very same objective. 5.1 Methods qualitative a quantitative Qualitative methods, sometimes called subjective or judgmental are in the rst case applied when historical data relating to the forecasted event are not suf cient or are not available and in the second case when forecasted events cannot be described by quanti able information or it refers to technology changes. Or, here can be also classed so-called pre-forecast derived from intuition and experience. Basic procedures used in qualitative methods are based on experience, contemplations or opinions of experts. Qualitative procedures are either research or normative. Research methods issue from information on the past and presence, they apply heuristic approaches to the future (often by studying all possible scenarios) so that the resulting forecast could answer to the question what and when will happen in the future. On the contrary, normative forecast starts with future targets and from them it returns into the presence and identi es what resources and technologies are necessary to attain the targets and what constraints are to be eliminated. Heuristic methods rationalize and systematize creative work in developing the forecast, they provide to clearly and effectively arrange a great amount of forecasting information, and they facilitate eliminating the logical errors and unnecessary mistakes. They shorten the solution by concentrating only on those variants of solution that with certain probability will meet the requirements of solution. In prognostics, it refers mainly 52

7 to approaches that do not use reliable data or laws of development but they rather use the experience of forecasting and intuition of the expert in selection of various hypothesis of future. Let us mention and detail some typical qualitative methods: v Naive Extrapolation. v Jury of executive opinion. v Delphi Panel. v Analogy or historic analogy. Naive extrapolation assumes that the next period results are in fact augmentation of the current period results. So, future predicted value is identical to the current value (measured). Consensus-based forecasts are based on opinion of experts in typical company activities such as marketing, manufacturing, sales, nances, etc. Delphi panel is a method that was developed in the military science for forecasting of complex problems. Method assumes involvement of forecast experts. These experts are asked using dialogue or written questionnaire in rounds lasting several days and they express forecast using values of selected parameters in accordance with preestablished instructions. During generation of forecast each expert remains anonymous for the other experts. The questions may be: Will according to your opinion an event or tendency occur? Answers of experts are gathered, evaluated, summarized, tabularized and then disseminated to all participating experts. Experts, based on the given data can re ne their previous forecast. It is repeated several times until the replies are stabilized. However, in a limit case it may happen that compliance is not achieved when experts insist consistently on their initial evaluation. For example for the area of forecast discoveries and inventions the procedure of Delphi panel could be as follows: 1. In the Round One the experts are asked to give discoveries and inventions they consider necessary and feasible in the next fty years in the area in which they are closely engaged in. Replies are evaluated and a list of the most frequently appearing predicted discoveries and inventions is produced. 2. All that responded to questionnaire in the Round One will receive the generated list and they are asked to identify the time in which with probability of 75<2009>% a discovery or inventions will occur. They also should give the reasons why the predicted date of occurrence cannot be sooner or later. Or, they may re ne the list. The responses are statistically evaluated (median and quartiles of time when the event may occur). 3. In the third round the experts are informed that there is conformity at some forecasts. The experts whose estimate differed are asked to justify their opinions. Or, 53

8 DEFENCE AND STRATEGY they may re ne their estimate or re ne ambiguities. The statistical evaluation is the same as in the previous round. 4. The content of the third round is repeated in the fourth round with further re nement of inquiries and re nement of responses if in the previous round a nedeed consensus was not achieved. Method of analogy is used for forecasting of one system based on studying its similarity with characteristics of other system (real or abstract). The effort is focused on identi cation as much as possible of identical and substantial characteristics and features. However, these are selected at random, but one should not be in uenced by prematurely created opinion. The characteristics studied should be uni ed in their content and form. Historical analogy assumes forecast based on the past events that are analogical with current situation. It issues from generalization of historical experience and impacts and consequences of social, economic and technical phenomena. Method of quantitative historical analogy compares values of characteristics of trends of historical and predicted trend. Method of quantitative historical analogy is used rather for illustration of probable character of development. Conclusion relating to qualitative methods: v The main bene t of these methods is a possibility to use a great amount of information. v Limitation of qualitative method is its non systematic employment in measurement and evaluation of accuracy of forecast and potential bias of experts. v They are suitable for long-term forecasts. In contrast to qualitative methods, the quantitative methods apply statistical analysis of data from the past in various time aspects. Prognostic using the historical data identi es the path of forecast, than he applies a suitable mathematical model and with the equations of model prognostic predicts points of the future. Such approach assumes that identi ed path for forecast continues also in the future. Quantitative methods are divided into two groups: 1. Time-series. 2. Econometric or causal. Time-series models analyze chronological sequences of observations of single variables. Observations can be carried out annually, quarterly, monthly, weekly, daily, every hour, etc. Variable in question can contain individual values measured, aggregated or derived data from economic or other area. However, methods that use time series assume that study of past values and their movement in time facilitates forecasting of future values of analyzed variable. Deterministic models derive values of forecasted variable (dependent) from behavior of other variables (independent). For example, magnitude of future sale can be derived from the volume of actual expenses, customer s available nancial means, prices of 54

9 products, etc. The objective of deterministic models is to express relations between independent variables using the mathematical formulae to determine the forecasted values of dependent variable. Extrapolation method is based on enlargement of studied developmental series. It is based on an assumption that studied process will develop in future in the same direction or with the same intensity. Extrapolation has rather high cognition value when it succeeds to formulate laws of development of forecasted phenomenon or process for example by a curve of development. The following basic curves of development have been described (see Fig. 1): v Development according to line (polynomial of the rst order) with linear growth/decrease which is a relatively rare phenomenon that occurs rather exceptionally in the society and in the nature. v Development according to cyclic curve, i.e. periodically repeating phenomenon. v Development according to parabola (polynomial of the second order) for trends characterized by one slope. v Development according to exponential, describes events whose intensity permanently increases/decreases. Usually these are the initial statuses of forecasted reality. v Development according to logistic curve ( S - curve) is typical for social events. It expresses the fact that exponential increase/decrease takes place within certain limits. Extrapolation methods can be focused on identi cation of trends of parameters, on examining of functional or structural characteristics of the objects of forecast. Procedures of application of extrapolation methods are: 1. Determination of the parameters of trend. 2. Selection of data characterizing the last development. 3. Selection of length of extrapolated period. 4. Determination of function (curve) expressing the future trend. Trend describes a relation between two or more parameters. If one of these parameters is time then it refers to time-series of observed indicators. Trend is de ned if data from more than of two cycles of its course are available and if it is possible to determine its beginning and its end. Selection of parameters depends on the objective of forecast required by the user. Suf ciently large list of parameters is achieved by concentrating on indicators that are the progress carriers. After determining the main parameters of development we identify supplementary, derived, supporting parameters and their impacts (acceleration/deceleration of trend). Collection of data follows for established parameters of development. Data are either time-series or series of interrelations independent on time. Time series are appropriately compiled from statistics data (volume of national income, number of automobi- 55

10 DEFENCE AND STRATEGY les, PCs, fuel consumption, ). Time series is characterized by the order and chronology of data where individual data are in absolute (measured) magnitudes in selected interval or as instant values or it is possible to work with derived values in the form of relative or average values. In time series we distinguish trend, cyclic (seasonal) and random components. There are two approaches to select the length of extrapolated period. The rst one assumes that reliably forecasted trends have a long-term character and that is why it is necessary to analyze the last duration as far as possible (the duration of forecast must not be longer than the reference series). On the contrary, the second approach does not consider the past as governing since the future can never repeat all impacts with the same intensity and direction. It then holds only for short-term periods up to 5 years. The curve of future trend can be some of the above-mentioned curves or any other curve. Dispersed values of parameter of trend are balanced using some of mathematical or graphical methods. Known are for example regression and correlation methods. In the rst stage of application of this method in forecasting it is usually looked for a suitable regression function that precisely as much as possible interleaves and balances the ordered set of values plotted in the correlation chart. In the second stage it is identi ed to what level the empirical values in correlation chart uctuate around the found regression function. Correlation of theoretical and measured values is calculated using the method of the least squares and proximity of their dependency using the correlation coef cient. Conclusion to the quantitative methods: v After appropriate selection of independent variable (variables) the forecast is based only on the values of this variable and thus it is objective. v There are methods of measurement of the accuracy of forecast. v If the model is constructed then generation of forecast depends on the time, only. v They are suitable for the short-term and medium-term forecasts. 56

11 Parameter value Logistic curve Parabola Exponential curve Line Cyclic curve Time Fig. 1: Curves of development 5.2 Passive, active and normative prediction Solution of passive prediction is a procedure of forecasting practice that is the simplest one. It is based on laws of reality and results of measurement; the forecaster extrapolates the statement about the future where the initial dependencies are valid also in the future. The basic steps of projection: 1. Identi cation of representative measurable characteristics of forecasted reality. 2. Determination of time dependency of values of this characteristic. 3. Determination of future value of characteristic in accordance with the extrapolation pattern. 57

12 DEFENCE AND STRATEGY While the rst step has a research character, the second and third step is based on observation, measurement and computer processing. Critical is a selection of characteristic, and it should be resistant against the time changes, sensitive to corresponding statement of forecasted reality and be in suitable computer processing format. Selection of characteristic leads to identi cation of directly measurable values reliably relating to it. Measured values are ordered into the time series so that it is possible to deduce from them the future values using the extrapolation pattern. Determination of this pattern is the subject of methods of mathematical statistics. The calculated result is subject to critical review based on the experience from the respect of credibility. The result can be denoted as non-credible if it exceeds the admissible value. Into the active prediction we may include the statements on human activities and their impacts, based on the reality cognition. Deriving the statement about the future is an estimate of the impacts of human activity. In relation to passive predictions it is more over the application of intuitive methods to predict relations of activity - a consequence. Methods of estimate are based on knowledge of experts for evaluation of reality retained by some model. We proceed in three steps: 1. Generation of model of forecasted reality. 2. Prediction of future by expert estimate or by simulation (based on the model). 3. Writing of scenarios of future development of reality. Generation of model should describe relations between behavior of people and the reality affected by this behavior and at the same time it is inherent in this behavior. To simply present this model we use verbal description of a list of events that have an impact upon behavior and that are prepared by asking the experts. Model should present varying relations and characteristics of components in a simpli ed system. Its creation contains determination of set of components that characterize the subject of forecast; determination and quanti cation of interactions within the set and facilitating correction of resulting forecast at the change of conditions and deriving the variants of conditions of development and organizational measures leading to achieve the given goals based on alternatives of development of the subject of forecast. Forecasting model can be described by a set of equations, graphically, verbally, by tables, etc. Modeling can embrace logical procedures (analogy, scenarios, ), it can apply mathematical and economic tools (statistics, econometric, ) or it may apply information sources and techniques (analysis of patent documentation, ). The system approach should be used for more complex models. Purposefully established section of reality - system is broken down into the components and we present their interrelations in terms of objective behavior of the system. It is important to properly de ne the objective function (objective of the system), a good knowledge of the user of forecast is necessary. Normative forecasting is designed to forecast needed or desirable targets and statuses of future, paths and time when they will be achieved. Normative forecasting 58

13 consists in identi cation and appraisal of established objectives, needs or visions about desired status in the future and variants how to attain them. Practice of normative prediction rstly analyses the institutional reality, and expresses it by a model. Using this model it produces visions about the future. Individual future statuses of organization are in uenced by standards that affect the behavior of institutions and people. Studied are the impacts of elements of strategy of behavior upon the formation of future. The results are recommendations for re nement of strategy of behavior. We can again evaluate the hierarchical system of objectives and resources and create the relevance tree from them. Complexity of forecasting practice has an in uence on the active behavior of the participants. The interests undergo development that can hardly be predicted. Forecaster judges the relation of cognition of the acting person to the reality, and uses for example the historical analogy or theory of games. Also other forecasts can be used, e.g. explorative (research) forecasts that describe potential future developmental statuses and tendencies of phenomena and processes. They reveal direction and intensity of future development. Fig. 2 shows a diagram of identi cation of objectives (left). Normative (goal) forecasts are devoted to potential or even necessary variant paths leading to the desired objective. So, standard to be attained is established. Fig. 2 shows a diagram of identi cation of objectives (right). Fig. 2: Identi cation of objectives and looking for the paths leading to target Brainstorming method was developed as a reaction to passive, non-creative and low level of discussions and meetings. Its goal is to stimulate creative thinking so that new non-traditional solutions of the selected issue could be formulated. It should prevent dependency of opinion of participants of discussion on the opinion of authorities; it should exclude suppression of new ideas and progressive opinions. The virtue of methods rests in accelerated discussion between the participants to a given topic, and the discussion should meet the following requirements: v Formulation of the topic of discussion is a selection between general and actual task. More general task facilitates obtaining more complex opinions; more con- 59

14 DEFENCE AND STRATEGY crete task enables more precise opinions. Topic of discussion should be known well in advance. v To criticize opinions and proposals during the discussion is not allowed (especially the phrases such as no can do it, it is rather more complex, who will do it, ). It should prevent enforcement of biases and traditional ideas of solution relating to the selected problem. v Ideas should be de ned exactly and precisely and as much as possible opinions should be presented. This will increase the probability that also non-traditional and progressive ideas will be presented. Time of one presentation should not exceed several minutes (3 5), which is de ned at the beginning of discussion. v Discussion is under control of organizer (moderator) who must assure free spontaneous course of discussion so that the ideas could develop and be pronounced quite unrestrained without mocking of anyone, without a loss of prestige, etc. Moderator directs the discussion only thematically; he himself does not take part in discussion (his authority could in uence the opinions of participants of the discussion). Moderator does not evaluate the opinions; he does not take any position to them. v Participants enter into the discussion without any introduction or courtesy phrases, nobody asks he wants to take the oor. Discussion can develop already presented opinions of the participants. That is why nobody who is conceited, non-tolerant, people who think that they know all should not be invited. In spite of an effort to eradicate the barriers of in uencing, it is preferred that the discussion participants should have nearly the same professional level and the participants should have multidisciplinary orientation. v The number of participants should respect the communication optimum, i.e. about Discussion should not last more than 2 hours, it should be held in the morning and in a friendly environment. Whole discussion should be properly documented. 6. ESTABLISHMENT OF THE TRUTH OF FORECAST Forecast is the result of a certain chain of cognition activities the solution of which is already veri ed or proved knowledge. These are the starting points of forecasting. Generally, there are logical relations between the starting points and results of forecasts, but they can be also intuitive. Forecast as the whole is truthful if truthful is its parts (starting points, procedures, results). To be able to forecast any object that will emerge in future or will be discovered, we must mostly start from the last or current knowledge. However, knowledge of facts about the presence does not create condition suf cient for forecasting. Together with facts it is necessary to know the developmental tendencies of forecasted events and processes or their laws. 60

15 At conclusion, forecasting assumes knowledge of starting points of two types: 1. Facts describing the actual situation. 2. Laws, theories and tendencies re ecting the characteristics of development. Determining the truthfulness of each kind of solutions has a different character. The initial facts con rm their truth by comparison with reality. Con rming the truthfulness of laws, theories and tendencies is more complicated, which is proved by discussions held permanently in this respect. We only claim that various scienti c disciplines have different ways of verifying the truth of laws. The easiest answer to the question of a true prediction is its comparison with the given reality. This answer is banal and non-acceptable for we cannot wait till the future arrives. We need to have a possibility to judge the reliability of prediction before. One of ways is to apply the veri cation procedures such as: v Direct veri cation veri cation of the same prediction by a different method. v Indirect veri cation comparison of two predictions of the same object which result from different solutions. v Veri cation by means of an opposition proceeding rebutting the critical objections to the results of prediction. v Veri cation by a competent expert comparing the resulting prediction with the opinion of an expert who did not participate in the creation of prediction. 7. CONCLUSION The aim of the article was to attract attention to the issue of prognostication for which an extensive study is available at the Institute of Strategic Studies of the Military Academy. Suitable methods, techniques and procedures of prognostication should be gradually put into practice at the Institute of Strategic Studies of the Military Academy and with their help the decision-making in the department of the Ministry of Defense should be supported. 61