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

Robert Fildes, Paul Goodwin and Dilek Önkal

International Journal of Forecasting, 2019, vol. 35, issue 1, 144-156

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.

Keywords: Sales and operations planning; Behavioral operations; Information effects; Forecaster behavior; Judgmental forecasting (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0169207018300062
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:35:y:2019:i:1:p:144-156

DOI: 10.1016/j.ijforecast.2017.12.006

Access Statistics for this article

International Journal of Forecasting is currently edited by R. J. Hyndman

More articles in International Journal of Forecasting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().