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Business forecasting methods: Impressive advances, lagging implementation.

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Organizations can improve decision-making with advanced forecasting methods, but many fail to adopt them. This study explores reasons for low adoption and suggests pathways for wider use of systematic forecasting.

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Area of Science:

  • Operations Research
  • Business Analytics
  • Management Science

Background:

  • Accurate forecasting is critical for operational and financial performance in various industries.
  • Recent advancements in forecasting methods offer significant potential for increased accuracy.
  • Despite benefits, many organizations do not adopt systematic forecasting practices.

Purpose of the Study:

  • To provide an overview of recent advances in forecasting techniques.
  • To investigate the reasons behind the low adoption rate of systematic forecasting methods.
  • To identify strategies for promoting the wider use of advanced forecasting.

Main Methods:

  • Literature review of recent forecasting advancements.
  • Analysis of survey data from organizations using forecasting.
  • In-depth semi-structured interviews with forecasting professionals.

Main Results:

  • Organizations face barriers to adopting advanced forecasting methods.
  • Lack of awareness, perceived complexity, and insufficient resources hinder adoption.
  • Specific organizational and technical factors influence the uptake of new forecasting tools.

Conclusions:

  • Despite proven benefits, systematic forecasting adoption remains low.
  • Addressing identified barriers is crucial for increasing the use of advanced forecasting.
  • Implementing targeted strategies can facilitate wider adoption and improve organizational performance.