Questions answered in this chapter:
On what basis do we evaluate forecasts?
If a drug company forecasts that it will sell 60 million units of a drug next year, what is the chance it will sell more than 65 million units of that drug next year?
Each day, we are constantly inundated by forecasts. Here are some examples:
The government predicts the GNP will grow by 4 percent during the next year.
The Eli Lilly marketing department predicts that during the next year, demand for a given drug will be 400,000,000 DOT (days of therapy).
A Wall Street guru predicts the Dow will go up 20 percent during the next 12 months.
The bookmakers forecast that the Indiana Pacers will beat the Houston Rockets by 6 in ...