S&OIS’s forecast replaces the current forecasting best practice with a new best practice: developing a forecast with the best possible profit, the most profitable one. The current best practice was shared with the author in the following quote from Professor Hanssens, UCLA’s Anderson school of business.
“Perhaps one additional perspective is the value of combining judgment and model based forecasts. I have attached an old, but very good article on this.” The article, “Data Based Models and Managerial Intuition” is available here.
Much more recently, a ChatGPT query on the same subject was performed. It agreed , concluding: “In many cases, an integrated approach that leverages the strengths of both human judgment and forecasting models can provide more robust and reliable results.”
S&OIS solves that problem by integrating the two forecasts in a single model with:
- a judgement-based forecast is an input
- then S&OIS creates a new best possible forecast, the most profitable one as an output.
S&OIS’s most profitable forecast is also always up to date.
NOTE: For an excellent article describing how “…human judgment “ or “managerial intuition” forecasts are developed, the interested reader is referred to Art Wilson’s IBF article “What is Business Forecasting and Demand Planning?”