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Probabilistic forecasting

Supply chain flashcard on probabilistic forecasting. It is a technique of producing a range of probabilities associated with all possible future demand values, instead of pinpointing one outcome as the forecast. What is the safety stock formula for probabilistic forecasting? It is essential for the economic prioritization of inventory decisions, based on their expected but unsure returns due to the irreducibility of uncertainty. So, with probabilistic forecasts we can compute the expected ROI of any decision? That's awesome! Only probabilistic forecasts let you optimize your supply chain decisions. Time series forecasts simply don't. The flashcard contains an image of a man in business suit with a suitcase making Fosbury flop.

Artist: Marina Besfamilnaya

Learn more in the entry Probabilistic forecasting of the Lokad knowledgebase.