FORESIGHT, Issue 41

Description

Spring 2016

Special Feature: Forecasting, Misbehavior and Control

Econs vs. Humans: Which Are We? Book Review of Misbehaving by Richard Thaler by Len Tashman
Misbehaving is a wonderfully entertaining account of Richard Thaler’s four-decade-long journey to convince fellow economists that they can’t ignore the human element of decision making – that there are just too many behavioral anomalies that are unexplainable by the standard economic theory.

Misbehaving Agents by Paul Goodwin
Paul Goodwin writes about forecasters who sometimes “misbehave” in their predictions, explaining the reasons and thinking behind these actions.

Misbehavior in Forecasting Financial Markets by Roy Batchelor
“How can it be, in spite of strong incentives to make good forecasts, that there is no consensus on how best to analyze and predict financial markets?” And how can so many apparently crazy methods survive and even prosper? The author says forecasting in this area is much different from, say, forecasting the weather, and goes on to discuss the challenges, pitfalls, and vagaries of the process.

Eliminating Sales-Forecasting Misbehaviors by John Mello
It’s difficult enough to achieve demand/supply integration (DSI) under normal circumstances, given supply delays, long lead times, capacity issues, changing demand, and the many other problems that can occur in a supply chain. This task becomes even more difficult when sales forecasts are inaccurate or misused.

Misbehaving, Misdesigning, and Miscommunicating in Forecasting Support Systems, by Fotios Petropoulos and Kostas Nikolopoulos
It’s said that there are two kinds of sins: sins of omission and sins of commission. In this short commentary, the authors try to unfold some of the sins committed by forecast users and vendors and also comment on the miscommunication of forecast uncertainty from the perspective both of users and systems.

Articles

1. Overcoming Barriers to Improving Forecasting Capabilities by Henry Canitz
   Despite enormous progress in forecasting methods, processes, and systems over the last few decades, it appears these benefits have yet to be reaped by many organizations, rooted as they are in “basic” forecasting approaches. We still see excessive reliance on spreadsheets, immature planning infrastructure, and ignorance of research findings that could be of real value. In this article, his first for Foresight, Hank Canitz draws on his experience as a practitioner and consultant to explore the impediments that restrain organizations from gaining the advantages of modern forecasting know-how.
2. Using Error Analysis to Improve Forecast Performance by Steve Morlidge
   Over the last two years Steve Morlidge has written a number of pieces for Foresight with proposals about how to improve the measurement of forecast error. In this article, he shows how these and related ideas can be used to manage the performance of the forecast process.
3. Forecaster in the Field – Mark Blessington
4. Forecasting: Academia versus Business by Sujit Singh
   Sujit Singh references a recent discussion on LinkedIn: Is there a disconnect between the academic and the business world when it comes to forecasting? His answer is to report what he sees in the marketplace pertaining to types of forecasting research and the gaps between such research findings and the questions raised by practitioners in the forecasting field.