A Better Way to Forecast. (November 2014)

• Record Type: Journal Article
• Authors: Haran, Uriel; Moore, Don A.
• Is Part Of: California management review. Volume 57:Number 1(2014)
• Page Start: 5
• Page End: 15
• Publication Date: 2014-11
• Subjects: Forecasting -- Human Behavior -- Decision Making; Industrial management -- Periodicals; Industrial management; Management; Bedrijfseconomie; Periodicals; 658.005
• DOI: 10.1525/cmr.2014.57.1.5
• Languages: English
• ISSNs: 0008-1256

Abstract

Every business decision depends on making a forecast of the consequences of the decision. Although most organizations do forecasting most do so badly. They ask either for a point prediction—a single "best guess" forecast when everyone knows that this is an oversimplification of the truth, or for a simple range forecast which is likely to result in biased predictions more often than not In this article, the authors propose a better approach, one that takes seriously the uncertainty in forecasting and the most common errors in the way people think about this uncertainty.