Forecasting in Practice Survey Results

Sanders and Manrodt (1994) surveyed 500 U.S. companies about their forecasting practices. The objectives of the survey were to ascertain the following  

Choice of forecasting method for short-term, medium-term, and long-term forecasting 

The survey included both manufacturing and service industries with annual sales between 6 million and 15 billion with the median at 1.5 billion. Hence, the results are somewhat skewed toward larger firms. About 20% of the companies ( 100) responded to the survey and their responses were used in the analysis. ITighlights of the survey results, reported by Sanders and Manrodt (1994), include the following  

Most managers prefer to under forecast (70%) compared to over forecast (15%) due to company s reward structure. Company s incentive system generally rewards those who exceed expectations. Those who over forecast are generally in the manufacturing departments since shortages are expensive and they are held accountable. 

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