Forecasting a future outcome, whether it is financial, event-based, units of demand, or some other informative piece of information, is a key part of decision making and strategy development. To speak broadly about forecasting, some projects are harder than others depending on if the object being forecasted is stable or volatile (for example Software ARR …
A Framework to Think About Forecast Accuracy Since one of the main values of forecasting is to assist better planning and decision-making, that could understandably lead one to think “We want 100% accuracy, and if that’s impossible, then at least 99%!”. This “magical number” threshold, while a good thing to aspire too, can hold you …
As a rule of thumb, I personally like to have 3 times more historical data relative to my forecast horizon (the distance into the future I want to forecast). However, this amount of data is not necessarily a hard stop when you use simpler forecasting methods such as ARIMA and exponential smoothing. The reason I …
