Use and misuse of information in supply chain forecasting of promotion effects

Fildes, Robert Alan and Goodwin, Paul and Onkal, Dilek (2019) Use and misuse of information in supply chain forecasting of promotion effects. International Journal of Forecasting, 35 (1). pp. 144-156. ISSN 0169-2070

[img]
Preview
PDF (Information-use-in-supply-chain-forecasting-revision-final-31-Oct-CLEAN_v3)
Information_use_in_supply_chain_forecasting_revision_final_31_Oct_CLEAN_v3.pdf - Accepted Version
Available under License Creative Commons Attribution-NonCommercial-NoDerivs.

Download (935kB)

Abstract

Demand forecasting is critical to sales and operations planning (S&OP), but the effects of sales promotions can be difficult to forecast. Typically, a baseline statistical forecast is judgmentally adjusted on receipt of information from different departments. However, much of this information either has no predictive value or its value is unknown. Research into base rate discounting has suggested that such information may distract forecasters from the average uplift and reduce accuracy. This has been investigated in situations in which forecasters were able to adjust the statistical forecasts for promotions via a forecasting support system (FSS). In two ecologically valid experiments, forecasters were provided with the mean level of promotion uplift, a baseline statistical forecast, and quantitative and qualitative information. However, the forecasters were distracted from the base rate and misinterpreted the information available to them. These findings have important implications for the design of organizational S&OP processes, and for the implementation of FSSs.

Item Type:
Journal Article
Journal or Publication Title:
International Journal of Forecasting
Additional Information:
This is the author’s version of a work that was accepted for publication in International Journal of Forecasting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Forecasting, 35, 1, 2019 DOI: 10.1016/j.ijforecast.2017.12.006
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1400/1403
Subjects:
ID Code:
90106
Deposited By:
Deposited On:
31 Jan 2018 15:58
Refereed?:
Yes
Published?:
Published
Last Modified:
19 Sep 2020 05:00