Demand Forecasting for Managers

CHAPTER 1

Introduction

1.1. The Value of a Good Forecasting Process

It is common to become frustrated about forecasting. The necessary data is often dispersed throughout the organization. The algorithms used to analyze this data are often opaque. Those within the organization trained to understand the algorithms often do not understand the business, and those who breathe the business do not understand the algorithms. The actual forecast is then discussed in long and unproductive consensus meetings between diverse stakeholders with often conflicting incentives; in between, the forecast is often confused with goals, targets, and plans. The resulting consensus can be a political compromise that is far removed from any optimal use of information. ...