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How to Solve a Difficult Forecasting Problem

The Boulder, The Cliff, and The BabyImagine you are faced with this very urgent problem: A large boulder is teetering on the edge of a cliff, at the bottom of which sits a baby, at risk of being crushed. How do you solve this problem?One solution...

Posted May 3, 2015    

Don't Fine Tune Your Forecast!

Does your forecast look like a radio? No? Then don't treat it like one.A radio's tuning knob serves a valid purpose. It lets you make fine adjustments, improving reception of the incoming signal, resulting in a clearer and more enjoyable...

Posted March 6, 2015    

ATM Replenishment: Forecasting and Optimization

Why do people steal ATMs? Because that's where the money is!!!While the old "smash-n-grab" remains a favorite modus operandi of would-be ATM thieves, the biggest brains on the planet typically aren't engaged in such endeavors (see Thieves...

Posted January 25, 2015    

Interview with Jonathon Karelse, Co-Founder of NorthFind Partners

Jonathon KarelseIn December the Institute of Business Forecasting published the first of a new blog series on Forecast Value Added. Each month I will be interviewing an industry forecasting practitioner (or consultant/vendor) about their use of FVA...

Posted January 17, 2015    

Alfred Hitchcock and a Classic Forecasting Scam

The Forecasting SavantSuppose you received an email from a self-proclaimed forecasting savant, advising you of a big upset in the upcoming mayoral election...and it turns out to be correct.You then get an email picking the underdog in the next...

Posted December 15, 2014    

Gaming the Forecast

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...

Posted November 24, 2014    

The Miracle of Combining Forecasts

Life gifts us very few miracles. So when a miracle happens, we must be prepared to embrace it, and appreciate its worth. Winter Storm PaxIn 1947, in New York City, there was the Miracle on 34th Street.In 1980, at the Winter...

Posted February 16, 2014    

The "Avoidability" of Forecast Error [PART 2]

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...

Posted August 8, 2013    

The "Avoidability" of Forecast Error

"Forecastability" is a frequent topic of discussion on The BFD, and an essential consideration when evaluating the effectiveness of any forecasting process. A major critique of forecasting benchmarks is that they fail to take forecastability into...

Posted August 6, 2013    

One-Number Forecasting: A New Worst Practice?

The one-number forecasting concept has been debated for years.Advocates argue that having different groups within the same organization working to different forecasts is insane. You can't have the supply chain building to X, the sales force selling...

Posted April 3, 2013    

Forecasting the Stock Market: Lessons Learned

There is a well recognized phenomenon that combining forecasts, derived from different methods using different sources of information, can improve forecast accuracy. This approach, sometimes called "ensemble forecasting," is available in SAS...

Posted March 12, 2013    

Forecasting Is Harder Than It Looks

Want to make weather forecasting look good? Compare it to predicting the economy. So concludes an ABC News Australia story by finance reporter Sue Lannin, entitled "Economic forecasts no better than a random walk." The story covers a recent...

Posted February 7, 2013