My friend Tom Reilly of Automatic Forecasting Systems posted this comment on the INFORMS discussion group on LinkedIn: Some use all of the data and some withhold data to find the best forecasting model? Withholding is arbitrary as changing the withhold from x to y means a completely different model

The Spring 2010 issue of Foresight is now available. Here is Editor Len Tashman’s preview: What’s the connection between hindsight and foresight? That is the question Paul Goodwin asks in his Hot New Research column leading off this issue. The problem is that hindsight bias – the tendency to believe

Although you probably didn’t notice, I stepped away from this blog for the last two months to think about something more important: The current state of business forecasting. I’d come to realize there is a lot of animosity in the world of forecasting. We have advocates of statistics, and advocates

In case you missed the business news last week, SAS (the company that pays me to write this blog, and the leader in business analytics) was named #1 on the FORTUNE 100 Best Companies to Work For 2010 list. Having been a user (and huge fan) of SAS software since

Today my colleague Alison Bolen, Editor of sascom magazine, sent me this link to an interesting piece on NPR: "Can Economic Forecasting Predict The Future?" In a somewhat lighthearted take on the inability of our economists to predict the future -- or even precisely report the past for that matter

Although I would like to flatter myself and believe that my readers rely solely on The BFD for all their business forecasting news and information, I realize this is not the case. While other sources may not be as honest, useful, or delightfully entertaining to young and old alike, they

Constance Korol oversees the Institute of Business Forecasting & Planning group on LinkedIn. (No, she isn’t the meaner one I will be referring to, but she can swing a nasty rolling pin if you get out of line.) This week Constance posted a Wall Street Journal article “Follow the Tweets,”

I’m going to put “An Operational Definition of ‘Demand’ – Part 3” on hold for a moment, to announce a new favorite article on forecasting, “Living in a world of low levels of predictability,” by Spyros Makridakis and Nassim Taleb (International Journal of Forecasting 25 (2009) 840-844. IJF is a

In the last post I argued that we don’t have a sure way to measure true (i.e. “unconstrained”) demand. While demand is commonly defined as “what the customer wants, and when they want it,” it is actually a nebulous concept. For a manufacturer, what a customer orders is not the

Sorry about not getting a post out last week, but I spent a good part of it cowering under my desk in fear. The SAS Security office issued a warning that there were wild coyotes roaming the campus, and I was having post-traumatic flashbacks to a painful encounter I once

Last week I was a guest of Gaurav Verma on the SAS Applying Business Analytics Web Series, and presented “What Management Must Know About Forecasting.” One of the most important things you can bring to management’s attention is the benefit of making your demand forecastable. In forecasting we tend to

There are some things about forecasting that you may only discover by being a forecaster. Simply managing a forecasting process, or being a downstream consumer of the forecast, isn't always enough. If you have something to say to your management about forecasting, but would rather avoid the confrontation, maybe we

Before we begin, I want to thank all of you readers who supported my righteous appeal for “THE BFD” license plate from the state of North Carolina. I am sad to report, however, that our efforts were in vain and the appeal was denied by Censorship Board of the Division

In case you haven't heard, the state of North Carolina needs money. Roads are falling apart, parks are left unkempt, prisoners are being released, and public school cafeterias can no longer afford to put anything surprising in their Chef's Surprise. In order to help assuage the crisis, and in my

Would you buy something that doesn’t have demonstrable Return on Investment? Of course you would! Whether you realize it or not, you do this every time you buy software. There is no proven ROI. Maybe this is just a pet peeve of mine. Maybe I care too much about cause

I’m back from a week of vacation in Michigan and bursting with new topics, but will have to get to those next week (still playing catch-up in my day job). I do, however, have the pleasure to announce the publication of a new book by my friend and colleague Charlie

The SAS internal discussion boards are always full of fascinating topics, some of which are even decipherable to a non-Ph.D. in statistics like me. A recent topic involved how to calculate the benefits of good forecasting software, and my colleague Robin Way offered an interesting perspective that he allowed me

Personally, I don’t get Twitter. I have an account (mvgilliland) for anyone interested in not hearing any tweets from me. I follow a few people and have a few followers (including some that aren't porn bots) -- but what is the point? Does anyone really care that I’m out hanging

The Summer 2009 issue of Foresight is now available, and features a section on “Rethinking the Ways We Forecast.” Here is Editor Len Tashman’s preview: Are traditional forecasting tools suitable for predicting complex systems like the economy and the global climate? Basically, no, argue David Orrell and Patrick McSharry: such

On a Monday July 20 segment of consumer advocate Clark Howard’s radio show, Clark discussed the common practice of hidden payments to influential bloggers. Apparently these high-tech shills pocket the payola, and then make favorable postings about particular products or services. According to Clark, there are new rules to prevent

Aren’t the internets wonderful? Just today I was trying to find the antonym of “naïve” and came across several terrific choices (sophisticated, worldly, well-informed, and intelligent) and one that didn’t make any sense (svelte???). However, upon further review at Merriam-Webster.com, I discovered that in addition to slender, lithe, and sleek

In April 2009, Google published a draft research paper “Predicting the Present with Google Trends,” by Google’s Chief Economist Hal Varian and Decision Support Engineering Analyst Hyungyoung Choi. The paper is available for download in an April 2 posting by Varian and Choy on the Google Research Blog that has

With apologies to Johnnie Cochran and Joyce Kilmer : “If the model do fit, it don’t prove ****” This was the warning from Trick #1. As a forecaster your job is to produce forecasts – as good as they can reasonably be expected to be – not to fit models

The Spring 2009 Foresight feature on assessing forecastability is a must-read for anyone who gets yelled at for having lousy forecasts. (It should also be read by those who do the yelling, but you’d have to be living in Neverland to believe that will ever happen.) As I promised in

Today I welcome guest blogger Len Tashman, Editor of Foresight: The International Journal of Applied Forecasting. I’ve been a big fan of Foresight since its inception in 2005, and the Spring 2009 issue contains a special feature on a topic close to my heart -- assessing forecastability. Here is Len’s

Tricks aren’t just for kids (or Louisiana senators or New York governors for that matter). Tricks are the lifeblood for many a forecasting software salesperson. Why admit that forecasting is difficult, that most things can’t be forecast as accurately as we would like, or that your software has the statistical