A Furnace uses fuel to generate its own source of heat and then circulates it through the house. Furnaces can be gas, oil or electric, depending on the need of your home.
As mentioned above, the biggest factor in determining whether a Heat Pump or Furnace is needed is where you live. For example, regions in with temperatures that often drop below freezing would be better suited for a furnace, as a heat pump wouldn’t be able to properly heat a home because it takes air from outside the house to use as a heating source which, in northern states, may be too cold.