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Preview of INFORMS Conference

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The INFORMS Conference on Business Analytics and Operations Research kicks off April 15 in Huntington Beach, CA. I had a chance to preview a presentation by Glenn Bailey, Sr. Director of Operations Research at Manheim (the $3B wholesaler auto auctioneer). Glenn's talk is on "The Need for Speed: Responsive Predictive Analytics," and he makes an important statement:

There's no correlation between Analytic Complexity and Business Value -- so conduct your analytics accordingly

We are in an age of amazing possibilities when it comes to the big data at our fingertips, and the high-performance analytics available for extracting knowledge and improving decisions. The technology lets us attack more types of problems, approaching them from different angles with more methods, and to do all this in much less time than it ever took before.

While the availability of this technology is a blessing, and our love of the technology is much deserved, we mustn't lose sight of the business problems we use this technology to solve. And, as Glenn asserts, we mustn't lose sight of the business value we are attempting to deliver.

For example, it is well-established in forecasting that simple methods can, and frequently do, perform better than more complicated methods. A moving average or simple exponential smoothing will be the most appropriate forecasting model in some situations, and there is no shame in that. While more complex or sophisticated methods can always give our model a better fit to history, this does does guarantee better forecasts. (See Makridakis, et al, Forecasting Methods and Applications (pp. 526-527) for a brief but excellent discussion of simple versus complex methods.)

Supply Chain & Forecasting Tracks

While at INFORMS, some other noteworthy presentations include:

 

 

Tags big data Glenn Bailey high-performance analytics INFORMS Makridakis Manheim
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About Author

Mike Gilliland

Product Marketing Manager

Michael Gilliland is a longtime business forecasting practitioner and formerly a Product Marketing Manager for SAS Forecasting. He is on the Board of Directors of the International Institute of Forecasters, and is Associate Editor of their practitioner journal Foresight: The International Journal of Applied Forecasting. Mike is author of The Business Forecasting Deal (Wiley, 2010) and former editor of the free e-book Forecasting with SAS: Special Collection (SAS Press, 2020). He is principal editor of Business Forecasting: Practical Problems and Solutions (Wiley, 2015) and Business Forecasting: The Emerging Role of Artificial Intelligence and Machine Learning (Wiley, 2021). In 2017 Mike received the Institute of Business Forecasting's Lifetime Achievement Award. In 2021 his paper "FVA: A Reality Check on Forecasting Practices" was inducted into the Foresight Hall of Fame. Mike initiated The Business Forecasting Deal blog in 2009 to help expose the seamy underbelly of forecasting practice, and to provide practical solutions to its most vexing problems.

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