2.1. Forecasting Methods
A forecast is an input to support decision making under uncertainty. Forecasts are created by a statistical model and/or by human judgment. A statistical model is nothing but an algorithm, often embedded into a spreadsheet model or other software, which converts data into a forecast. Of course, choosing which algorithm an organization uses for forecasting and how this algorithm is implemented often requires the use of human judgment as well. However, when we examine the role of human judgment in forecasting, we mean that judgment is used in lieu of or in combination with a statistical forecast. Human judgment is thus the intuition and cognition that decision makers can employ to convert ...
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