Deciding about the uncertain: The use of forecasts as an aid to decision-making

The present paper discusses the role of forecasting in managerial decision-making. It is suggested that forecasts may be used not only for the purpose of prediction, but also in order to generate knowledge, guide policy decisions and monitor system performance. Research on judgmental and formal forecasting methods is reviewed, and it is argued that several forecasts based on both methods should be used. The use of multiple forecasts is advocated on the grounds that it will give an increased awareness of the degree of uncertainty associated with the future, and will avoid a false sense of certainty which may be the result of obtaining only one forecast. Ways of handling competing forecasts, and issues involved in the communication and implementation of forecasts, are also discussed.