Whereas AI fashions have taken the highlight, conventional statistical fashions stay extremely precious instruments for demand forecasting
Hiya Medium readers!
At present, we’ll dive into forecasting methods utilized to demand planning, a area that I’m extremely invested in because of my provide chain background and keenness for knowledge science. Just lately, I’ve been studying up on this matter, revisiting books and articles on demand forecasting to give you some recent insights.
To kick issues off, let me share a thought-provoking quote by British statistician George E. P. Field:
“All fashions are improper, however some are helpful.”
As you replicate on this quote, you would possibly surprise: why even trouble forecasting the long run if no mannequin can ever be solely correct? Consider it like climate forecasting: it helps us plan forward. Ought to I convey an umbrella tomorrow? Ought to I placed on sunscreen? Ought to I take shelter from a hurricane? Forecasts, whereas imperfect, information us in making higher selections.
In demand planning, it’s no completely different. Demand planners and different firm stakeholders use forecasts to anticipate future wants and modify…
