π‘

Professionals forget the following reality. It is not the estimate or the forecast that matters so much as the degree of confidence with the opinion.

π

80

80

π

.forecasting giving confidence levels is key in forecasting

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You would take a different set of clothes on your trip to some remote destination if I told you that the temperature was expected to be seventy degrees Fahrenheit, with an expected error rate of forty degrees than if I told you that my margin of error was only five degrees. The policies we need to make decisions on should depend far more on the range of possible outcomes than on the expected final number.

π

380

380

π

.forecasting the range of a forecast can be more important than the expected final number

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The second fallacy lies in failing to take into account forecast degradation as the projected period lengthens. We do not realize the full extent of the difference between near and far futures. Yet the degradation in such forecasting through time becomes evident through simple introspective examination--without even recourse to scientific papers, which on this topic are suspiciously rare. Consider forecasts, whether economic or technological, made in 1905 for the following quarter of a century.

π

601

601

π

.forecasting forecasting far into the future is extremely difficult

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A forecast is a calculation about the future completion of an item or items that includes both a date range and a probability.

π

1210

1210

π

Forecast includes date range and probability

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π‘

the turkey problem. You look at the past and derive some rule about the future.

π

1547

1547

π

.forecasting the turkey problem

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π‘

Do not use Little's Law for forecasting. Do not use averages for forecasting. Straight line projections are problematic because they are based on averages and because they do not communicate a probability of success.

π

1873

1873

π

.forecasting

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