So you think you can outsmart your statistical forecast? Apparently, lots of people do. In "Judgmental Adjustments to Forecasts in the New Economy" (Foresight, Issue 38 (Summer 2015), 31-36), Manzoor Chowdhury and Sonia Manzoor argue that forecasters are becoming more dependent on judgmental adjustments to a statistical forecast. Sometimes this
Editor Len Tashman's Preview of the Spring issue of Foresight The Special Feature article of this 37th issue of Foresight – From Sales and Operations Planning to Business Integration – comes about through a rare but effective collaboration between an academic and a practitioner. The coauthors are Mark Moon, head
Sports provide us with many familiar clichés about playing defense, such as: Defense wins championships. The best defense is a good offense. Or my favorite: The best defense is the one that ranks first statistically in overall defensive performance, after controlling for the quality of the offenses it has faced. Perhaps not
Combining Statistical Analysis with Subjective Judgment (continued) After summarily dismissing regression analysis and correlation analysis as panaceas for the business forecasting problem, Lorie turns next to "salesmen's forecasts."* He first echoes the assumption that we still hear today: This technique of sales forecasting has much to commend it. It is based
*** We interrupt discussion of James H. Lorie's 1957 article with this important announcement *** Hot off the wire, here is editor Len Tashman's preview of the Winter 2015 issue of Foresight: Foresight kicks off its 10th year with the publication of a new survey of business forecasters: Improving Forecast Quality in
Brilliant, humorous, and obscure. Those words could describe two of my favorite comedians, Emo Philips* and the late Dennis Wolfberg. They could also describe, with the addition of "exceedingly" brilliant, "scathingly" humorous, and "apparently totally" obscure, a 1957 article, "Two Important Problems in Sales Forecasting" by James H. Lorie (The
There are some things every company should know about the nature of its business. Yet many organizations don't know these fundamentals -- either because they are short on resources, or their resources don't have the analytical skills to do the work. The summer research projects offered by the Lancaster Centre for Forecasting,
Business forecasting is a highly politicized process, subject to the biases and personal agendas of all forecasting process participants. This is why many -- perhaps most -- human adjustments to the forecast fail to make it better. And this is why relative metrics, such as FVA, are so helpful in
In his Spring 2014 article in Foresight, Paul Goodwin addressed the important issue of point vs. probabilistic forecasts. A point forecast is a single number (e.g., the forecast for item XYZ in December is 635 units). We are all familiar with point forecasts, as these are what's commonly produced (either
In 2015 Foresight: The International Journal of Applied Forecasting will celebrate 10 years of publication. From high in his aerie in the Colorado Rockies, here is Editor-in-Chief Len Tashman's preview of the current issue: In this 35th issue of Foresight, we revisit a topic that always generates lively and entertaining
On Thursday, October 30, 11 am ET, Aris Syntetos delivers the next installment of the Foresight/SAS Webinar Series, "Forecasting by Temporal Aggregation." Based on his article in the Summer 2014 issue of Foresight, Aris provided this preview: When we attempt to improve forecast performance we usually consider new or alternative forecasting
It is after Labor Day in the US, meaning we must no longer wear white shoes, skirts, jackets, or trousers. But even if you are now going sans-culotte, it is time to begin thinking about organizational performance objectives for 2015. Setting forecasting performance objectives is one way for management to shine...or
Again this year (for the 12th time), SAS Research & Development has funded two $5,000 research grants, to be awarded by the International Institute of Forecasters. Criteria for award of the grant will include likely impact on forecasting methods and business applications. Consideration will be given to new researchers in
On July 24, 10am ET, Stavros Asimakopoulos delivers the next installment of the Foresight/SAS Webinar Series, "Forecasting 'In the Pocket': Mobile Devices Can Improve Collaboration." Based on his article (co-authored with George Boretos and Constantinos Mourlas) in the Winter 2014 issue of Foresight, Stavros will discuss how smartphones, tablet computers
The BFD blog probably won't make you the best forecaster you can be. There are plenty of books and articles and world class forecasting researchers (many of them meeting next week in Rotterdam at the International Symposium on Forecasting), that can teach you the most sophisticated techniques to squeeze every last
Our tradition from Foresight’s birth in 2005 has been to feature a particular topic of interest and value to practicing forecasters. These feature sections have covered a wide range of areas: the politics of forecasting, how and when to judgmentally adjust statistical forecasts, forecasting support systems, why we should
We're entering the busy season for forecasting events, and here is the current calendar: Analytics2014 - Frankfurt The European edition of Analytics2014 kicks off tomorrow in Frankfurt, Germany. Five hundred of the leading thinkers and doers in the analytics profession hook up for two full days of interaction and learning.
As we saw last time with Steve Morlidge's analysis of the M3 data, forecasts produced by experts under controlled conditions with no difficult-to-forecast series still failed to beat a naive forecast 30% of the time. So how bad could it be for real-life practitioners forecasting real-life industrial data? In two words:
The Spring 2014 issue of Foresight includes Steve Morlidge's latest article on the topic of forecastability and forecasting performance. He reports on sample data obtained from eight business operating in consumer (B2C) and industrial (B2B) markets. Before we look at these new results, let's review his previous arguments: 1. All
Here is editor Len Tashman's preview of the new Spring 2014 issue of Foresight. In particular note the new article by Steve Morlidge of CatchBull, reporting on an analysis of eight B2B and B2C companies, which we'll discuss in a separate post. An organization’s collaboration in forecasting and planning has
Q: How would you set the target for demand planners: all products at 0.7? All at practical limit (0.5)? A: In principle, forecasts are capable of being brought to the practical limit of an RAE of 0.5. Whether it is sensible to attempt to do this for all products irrespective
Q: How important is it to recognize real trend change in noisy data? A: It is very important. In fact the job of any forecast algorithm is to predict the signal – whether it is trending or not – and to ignore the noise. Unfortuantely this is not easy to
Q: Do you think the forecaster should distribute forecast accuracy to stakeholders (e.g. to show how good/bad the forecast is) or do you think this will confuse stakeholders? A: This just depends what is meant by stakeholders. And what is meant by forecast accuracy. If stakeholders means those people who
In a pair of articles published in Foresight, and in his SAS/Foresight webinar "Avoidability of Forecast Error" last November, Steve Morlidge of CatchBull laid out a compelling new approach on the subject of "forecastability." It is generally agreed that the naive model (i.e. random walk or "no change" model) provides
SAS/Foresight Webinar Series On Thursday February 20, 11am ET, join Martin Joseph, Managing Owner of Rivershill Consultancy for this quarter's installment of the SAS/Foresight Webinar Series. Martin will be presenting "The Forecasting Mantra" -- a template that identifies the elements required to achieve sustained, world-class forecasting and planning excellence. He'll also
In this quarter's installment of the SAS/Foresight Webinar Series, Martin Joseph and Alec Finney of Rivershill Consultancy discuss "The Forecasting Mantra." Based on their article in the Winter 2009 issue of Foresight: The International Journal of Applied Forecasting, the webinar provides a template that identifies all the elements required to achieve sustained, world-class forecasting
High in the mountains of Colorado, Foresight editor-in-chief Len Tashman previews the new issue: What proficiencies are essential for today’s business forecasters and planners? Sujit Singh offers a detailed and quite formidable list in Critical Skills for the Business Forecaster, our feature article in this 32nd issue of Foresight. While
If you need an excuse to get out of the office and perhaps learn a thing or two this fall, here are three upcoming events: Foresight Practitioner Conference: S&OP and Collaborative Forecasting (Columbus, OH, September 25-26) From the campus of Ohio State University, Foresight's editor Len Tashman and S&OP column
Suppose we have a perfect forecasting algorithm. This means that we know the "rule" guiding the behavior we are forecasting (i.e., we know the signal), and we have properly expressed the rule in our forecasting algorithm. As long as the rule governing the behavior doesn't change in the future, then any
While I've long advocated the use of Coefficient of Variation (CV) as a quick and dirty indicator of the forecastability of a time-series, its deficiencies are well recognized. It is true that any series with extremely low CV can be forecast quite accurately (using a moving average or simple exponential smoothing
