itsual Forecasting
Overview
Forecasting supports planning under uncertainty. A useful forecast is accurate enough, timely, and packaged so decisions can use the range — not only a single point.
When to Use
- Demand and supply planning
- Revenue and financial forecasting support
- Capacity and staffing forecasts
- Seasonal business planning
Core Practices
- Establish naive/seasonal baselines first
- Incorporate known future drivers (promos, launches, holidays) carefully
- Evaluate with time-aware CV and business-relevant errors
- Provide prediction intervals or scenarios
- Monitor forecast bias over time and recalibrate
- Align forecast grain with planning decisions
Principles
- Point forecasts hide risk — show uncertainty
- Bias can hurt more than variance for some operations
- Process changes invalidate historical patterns
- Stakeholder trust depends on honest error communication
Verification
- Baselines are beaten or the gap is explained
- Evaluation is time-respecting
- Uncertainty is communicated to users of the forecast