It’s Gotten Hard To Forecast

It’s Gotten Hard to Forecast By Larry Lapide, Ph.d. (This is an ongoing column in The Journal, which is intended to give a brief view on a potential topic of interest to practitioners of business forecasting. Suggestions on topics that you would like to see covered should be sent via e-mail to llapide@mit.edu) P P rofessor Chaman Jain emailed me the request last month that I dedicate this JBF column to the topic of forecasting the “un-forecastable.” Sounding like a contradiction in terms, I asked him what he meant. He stated that “all products are not equally forecastable” and that I should discuss “how to handle the products that are difficult to forecast— products with intermittent demand, new products, etc.” So the topic of this column is largely forecasting the hard-to-forecast (HTF), which also turn out to be the type of forecasting that will be needed more during the turbulent economic times where we currently find ourselves. Un-ForecastaBLe VersUs InterMIttent To me, the un-forecastable usually involves catastrophic events that very rarely happen. They might be man-made, such as deep economic recessions and depressions, wars, and terrorist attacks such ...