Stop Saying Forecasts Are Always Wrong! | Embracing Uncertainty & Range Forecasts
IBF on Demand episode 10 sponsored by Arkieva, your one-plan S&OP software. Learn more about Arkieva's innovative approach to forecasting here: https://bit.ly/forecast-modelingBecome an IBF member here: https://bit.ly/ibf-membershipI get on my soap box and explain why that statement is wrong and how you can, in fact, be 100% right. I also discuss why moving away from just a point forecast to forecast ranges (and getting comfortable with uncertainty) provides so much more value to decision makers. By changing our mindset, we can reveal the real value lying in variability. After all, our role is not to be precise, but to provide useful insights. 02:00 IBF membership - the demand planning club that helps your career03:15 Why saying "forecasts are always wrong" harms us and our companies05:28 Your job is not about numbers, but about insights08:25 Getting comfortable with ambiguity 10:10 Becoming probabilistic thinkers - forecasting ranges vs. single numbers14:14 Measuring forecast error and my favorite KPI15:18 The valuable information lying in uncertainty and variability that decision makers need to know21:15 Providing the right forecast range with cones of uncertainty 23:05 Coefficient of Variation (CoV) and Demand Variation Index (DVI)27:18 Using the right KPIs to measure the full spectrum of uncertainty30:18 The goal is not to be precise but to provide useful insights Article on eScore, a measurement of probabilistic forecast performance that measures error, range and probability all in one formula: https://demand-planning.com/2018/08/16/introducing-escore-simplified-mape-for-todays-business/Find out more about IBF at www.ibf.org and www.demand-planning.comFind out about Arkieva at www.arkieva.comSupport the showTo sign up for regular updates and the latest research, events, articles, podcasts and more from the Institute of Business Forecasting & Training, visit www.ibf.org