This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via HighWire Citing Articles via Google Scholar Google Scholar Articles by Fildes, R. Articles by Goodwin, P. Search for Related Content

Against Your Better Judgment? How Organizations Can Improve Their Use of Management Judgment in Forecasting

Department of Management Science, Lancaster University Management School, Lancaster LAI 4YX, United Kingdom
Management School, University of Bath, Claverton Down, Bath BA2 7AY, United Kingdom
r.fildes{at}lancaster.ac.uk
mnspg{at}bath.ac.uk

Accurate forecasts are crucial to successful organizational planning. In 2001, 40 international experts published a set of principles to guide best practices in forecasting. Some of these principles relate to the use of management judgment. Most organizations use judgment at some stage in their forecasting process, but do they do so effectively? Although judgment can lead to significant improvements in forecasting accuracy, it can also be biased and inconsistent. The principles show how forecasters should use judgment and assess its effectiveness. We conducted a survey of 149 forecasters to examine the use of judgment based on these established principles and to investigate whether their forecasting procedures were consistent with the principles. In addition, we conducted four in-depth case studies. Although we found examples of good practice, we also discovered that many organizations would improve forecast accuracy if they followed basic principles such as limiting judgmental adjustments of quantitative forecasts, requiring managers to justify their adjustments in writing, and assessing the results of judgmental interventions.

Key Words: applications; forecasting

This article has been cited by other articles:

				Y. Boulaksil and P. H. Franses Experts' Stated Behavior Interfaces, March 1, 2009; 39(2): 168 - 171. [Abstract] [PDF]

				J. S. Armstrong, K. C. Green, and W. Soon Polar Bear Population Forecasts: A Public-Policy Forecasting Audit Interfaces, September 1, 2008; 38(5): 382 - 405. [Abstract] [PDF]