What is a statistical tool used to investigate relationships between variables that aids in forecasting?

Regression analysis is a statistical tool specifically designed to examine the relationship between variables. It helps in determining how the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed. This analysis can be particularly useful in forecasting since it allows organizations to predict future outcomes based on established trends observed in historical data.

For instance, in a business context, regression analysis might be utilized to forecast sales based on advertising spend or market conditions. By understanding these relationships, organizations can make informed predictions and strategic decisions, enhancing their ability to plan for future scenarios effectively.

In contrast, variance analysis focuses on the difference between planned financial outcomes and actual financial performance and does not prioritize relationships between variables. Factor analysis is primarily used for identifying underlying relationships within a set of variables rather than for forecasting purposes. SWOT analysis is a strategic planning tool that assesses strengths, weaknesses, opportunities, and threats, but does not employ statistical methods for examining variable relationships.