Do experts' adjustments on model-based SKU-level forecasts improve forecast quality?
Model-based SKU-level forecasts are often adjusted by experts. In this paper we propose a statistical methodology to test whether these expert forecasts improve on model forecasts. Application of the methodology to a very large database concerning experts in 35 countries who adjust SKU-level forecasts for pharmaceutical products in seven distinct categories leads to the general conclusion that expert forecasts are equally good at best, but are more often worse than model-based forecasts. We explore whether this is due to experts putting too much weight on their contribution, and this indeed turns out to be the case.
|Keywords||expert forecasts, forecasting, model forecasts|
|Persistent URL||dx.doi.org/10.1002/for.1129, hdl.handle.net/1765/19985|
|Journal||Journal of Forecasting|
Franses, Ph.H.B.F, & Legerstee, R. (2010). Do experts' adjustments on model-based SKU-level forecasts improve forecast quality?. Journal of Forecasting, 29(3), 331–340. doi:10.1002/for.1129