The impact of forecasting on companies' performance: Analysis in a multivariate setting
Over the years, practitioners and researchers have devoted their attention to forecasting techniques and methods that can be adopted to improve companies' performance. However, forecasting techniques alone are not enough since companies should also consider several other issues associated with forecasting process management, e.g. how companies collect and use information on the market, or how the forecast is used in different decision-making processes. It is also important to understand the existence of interaction effects between these different forecasting variables, as they could determine a positive additional synergistic effect on companies' performance. This paper aims to investigate what relevant forecasting variables should be considered to improve companies' performance, and whether some forecasting variables can interact and influence performance with a synergistic effect. Analyses are conducted by means of data collected by the Global Manufacturing Research Group (GMRG). Data from a sample of 343 manufacturing companies in 6 different countries demonstrate that when companies intend to improve cost and delivery performances, they should devote their attention to all the different forecasting variables. In addition, the results found reveal the existence of positive interaction effects between the collection and use of information on the market and the other forecasting variables, as well as the existence of a negative interaction effect between the adoption of forecasting techniques and the use of forecasts in several decision-making processes. These results have important implications for managers as they provide guidance on how to lever on the different forecasting variables to maximize companies' performance.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Remus, William & O'Connor, Marcus & Griggs, Kenneth, 1995. "Does reliable information improve the accuracy of judgmental forecasts?," International Journal of Forecasting, Elsevier, vol. 11(2), pages 285-293, June.
- Kalchschmidt, Matteo & Zotteri, Giulio & Verganti, Roberto, 2003. "Inventory management in a multi-echelon spare parts supply chain," International Journal of Production Economics, Elsevier, vol. 81(1), pages 397-413, January.
- Yossi Aviv, 2001. "The Effect of Collaborative Forecasting on Supply Chain Performance," Management Science, INFORMS, vol. 47(10), pages 1326-1343, October.
- Sanders, Nada R., 2009. "Comments on "Effective forecasting and judgmental adjustments: An empirical evaluation and strategies for improvement in supply-chain planning"," International Journal of Forecasting, Elsevier, vol. 25(1), pages 24-26.
- Wright, George & Lawrence, Michael J. & Collopy, Fred, 1996. "The role and validity of judgment in forecasting," International Journal of Forecasting, Elsevier, vol. 12(1), pages 1-8, March.
- Moon, Mark A. & Mentzer, John T. & Smith, Carlo D. & Garver, Michael S., 1998. "Seven keys to better forecasting," Business Horizons, Elsevier, vol. 41(5), pages 44-52.
- Zotteri, Giulio & Kalchschmidt, Matteo, 2007. "Forecasting practices: Empirical evidence and a framework for research," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 84-99, July.
- Enns, S. T., 2002. "MRP performance effects due to forecast bias and demand uncertainty," European Journal of Operational Research, Elsevier, vol. 138(1), pages 87-102, April.
- Bartezzaghi, Emilio & Verganti, Roberto & Zotteri, Giulio, 1999. "A simulation framework for forecasting uncertain lumpy demand," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 499-510, March.
- Mentzer, John T. & Bienstock, Carol C. & Kahn, Kenneth B., 1999. "Benchmarking sales forecasting management," Business Horizons, Elsevier, vol. 42(3), pages 48-56.
- Davis, Donna F. & Mentzer, John T., 2007. "Organizational factors in sales forecasting management," International Journal of Forecasting, Elsevier, vol. 23(3), pages 475-495.
- Fildes, Robert & Goodwin, Paul & Lawrence, Michael & Nikolopoulos, Konstantinos, 2009. "Effective forecasting and judgmental adjustments: an empirical evaluation and strategies for improvement in supply-chain planning," International Journal of Forecasting, Elsevier, vol. 25(1), pages 3-23.
- Sanders, Nada R. & Manrodt, Karl B., 2003. "The efficacy of using judgmental versus quantitative forecasting methods in practice," Omega, Elsevier, vol. 31(6), pages 511-522, December.
- Clemen, Robert T., 1989. "Combining forecasts: A review and annotated bibliography," International Journal of Forecasting, Elsevier, vol. 5(4), pages 559-583.
- Lawrence, Michael & O'Connor, Marcus & Edmundson, Bob, 2000. "A field study of sales forecasting accuracy and processes," European Journal of Operational Research, Elsevier, vol. 122(1), pages 151-160, April.
- Dalrymple, Douglas J., 1987. "Sales forecasting practices: Results from a United States survey," International Journal of Forecasting, Elsevier, vol. 3(3-4), pages 379-391.
- Gérard P. Cachon & Marshall Fisher, 2000. "Supply Chain Inventory Management and the Value of Shared Information," Management Science, INFORMS, vol. 46(8), pages 1032-1048, August.
- Zotteri, Giulio & Verganti, Roberto, 2001. "Multi-level approaches to demand management in complex environments: an analytical model," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 221-233, May.
- Armstrong, J. Scott, 1989. "Combining forecasts: The end of the beginning or the beginning of the end?," International Journal of Forecasting, Elsevier, vol. 5(4), pages 585-588.
When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:458-469. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.