The Forecaster's Predicament: Communicating Uncertainty Effectively

As Demand Planners, we know that uncertainty is an intrinsic part of every forecast. We also know that when we communicate that uncertainty, our forecasts may be less likely to be trusted and used in the organization. How then do we communicate an honest and realistic picture of demand that also gains the confidence of our colleagues? In this article I discuss how to get round this problem by using Prediction Intervals, an approach that communicates both a forecast range and its likelihood of occurring, as well different visual ways to present probability. I also explore psychological factors that impact the likelihood of your forecast ranges being accepted which, once understood, can help us reconcile the oft-encountered tradeoff between accuracy vs. informativeness