Integrating judgmental and quantitative forecasts: methodologies for pooling marketing and operations information
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 1 May 2004
Abstract
Accurate forecasting has become a challenge for companies operating in today's business environment, characterized by high uncertainty and short response times. Rapid technological innovations and e‐commerce have created an environment where historical data are often of limited value in predicting the future. In business organizations, the marketing function typically generates sales forecasts based on judgmental methods that rely heavily on subjective assessments and “soft” information, while operations rely more on quantitative data. Forecast generation rarely involves the pooling of information from these two functions. Increasingly, successful forecasting warrants the use of composite methodologies that incorporate a range of information from traditional quantitative computations usually used by operations, to marketing's judgmental assessments of markets. The purpose of this paper is to develop a framework for the integration of marketing's judgmental forecasts with traditional quantitative forecasting methods. Four integration methodologies are presented and evaluated relative to their appropriateness in combining forecasts within an organizational context. Our assessment considers human factors such as ownership, and the location of final forecast generation within the organization. Although each methodology has its strengths and weaknesses, not every methodology is appropriate for every organizational context.
Keywords
Citation
Sanders, N.R. and Ritzman, L.P. (2004), "Integrating judgmental and quantitative forecasts: methodologies for pooling marketing and operations information", International Journal of Operations & Production Management, Vol. 24 No. 5, pp. 514-529. https://doi.org/10.1108/01443570410532560
Publisher
:Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited