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The Folly of Forecasting: The Effects of a Disaggregated Demand Forecasting System on Forecast Error, Forecast Positive Bias, and Inventory Levels
The Accounting Review ( IF 5.182 ) Pub Date : 2020-04-09 , DOI: 10.2308/tar-2018-0559
Alexander Brüggen 1 , Isabella Grabner 2 , Karen L. Sedatole 3
Affiliation  

Periodic demand forecasts are the primary planning and coordination mechanism within organizations. Because most demand forecasts incorporate human judgment, they are subject to both unintentional error and intentional opportunistic bias. We examine whether a disaggregation of the forecast into various sources of demand reduces forecast error and bias. Using proprietary data from a manufacturing organization, we find that absolute demand forecast error declines following the implementation of a disaggregated forecast system. We also find a favorable effect of forecast disaggregation on finished goods inventory without a corresponding increase in costly production plan changes. We further document a decline in positive forecast bias, except for products whose production is limited owing to scarce production resources. This implies that disaggregation alone is not sufficient to overcome heightened incentives of self-interested sales managers to positively bias the forecast for the very products that an organization would like to avoid tying up in inventory.

中文翻译:

预测的愚蠢:分类需求预测系统对预测误差,预测正偏差和库存水平的影响

定期需求预测是组织内部的主要计划和协调机制。由于大多数需求预测都包含人为的判断,因此它们会遭受无意的错误和有意的机会主义偏见。我们研究了将预测分解为各种需求来源是否可以减少预测误差和偏差。使用来自制造组织的专有数据,我们发现,在实施分类预测系统之后,绝对需求预测误差会下降。我们还发现预测分类对成品库存有有利影响,而不会相应增加昂贵的生产计划变更。我们进一步记录了积极的预测偏差的下降,但由于生产资源短缺而产量有限的产品除外。
更新日期:2020-04-09
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