Are we too obsessed with forecast accuracy? My experience in the forecasting and planning domain leads me to question the widespread notion that accuracy is a good driver of corporate success. The M5 forecasting competition, which uses over 30,000 time series, uncovers unexpected insights. Contrary to common belief, it reveals that an exclusive emphasis on accuracy doesn’t consistently improve decision-making or economic outcomes. This analysis prompts a revaluation of the traditional pursuit of accuracy, advocating for a balanced approach prioritizing economic value in forecasting and decision-making ...

From Issue: A Spiral Into AI Mediocrity: AI is Not Taking Your Job Anytime Soon
(Spring 2024)

Forecasting Fallacy Exposed: The Economics Behind Accuracy