Principles of Forecasting - A Handbook for Researchers and Practitioners (International Series in Operations Research & Management Science) [Hardcover]

J.S. Armstrong (Editor)

Book Description

Series: International Series in Operations Research & Management Science | Publication Date: May 1, 2001

Principles of Forecasting: A Handbook for Researchers and Practitioners summarizes knowledge from experts and from empirical studies. It provides guidelines that can be applied in fields such as economics, sociology, and psychology. It applies to problems such as those in finance (How much is this company worth?), marketing (Will a new product be successful?), personnel (How can we identify the best job candidates?), and production (What level of inventories should be kept?). The book is edited by Professor J. Scott Armstrong of the Wharton School, University of Pennsylvania. Contributions were written by 40 leading experts in forecasting, and the 30 chapters cover all types of forecasting methods. There are judgmental methods such as Delphi, role-playing, and intentions studies. Quantitative methods include econometric methods, expert systems, and extrapolation. Some methods, such as conjoint analysis, analogies, and rule-based forecasting, integrate quantitative and judgmental procedures. In each area, the authors identify what is known in the form of `if-then principles', and they summarize evidence on these principles. The project, developed over a four-year period, represents the first book to summarize all that is known about forecasting and to present it so that it can be used by researchers and practitioners. To ensure that the principles are correct, the authors reviewed one another's papers. In addition, external reviews were provided by more than 120 experts, some of whom reviewed many of the papers. The book includes the first comprehensive forecasting dictionary.

Editorial Reviews

Review

`...Its wide-ranging scope ensures that almost every type of forecasting activity is reviewed and summarised and distilled into principles by an expert in that particular field. ... Its broad scope and thorough summary of the available evidence makes it a valuable guide for any quantitative professional venturing into an unfamiliar area of forecasting.' John Aitchison, Director of DataSciencesResearch (www.DataSciencesResearch.com) `This very readable handbook provides a comprehensive synopsis of the entire field of forecasting. The editor, Scott Armstrong, is highly qualified to pull together such a volume. He has been centrally involved in the development of the subject for more than two decades. Armstrong's publications cover the field, ranging from econometric modeling and the extrapolation of time-series data, to role playing and opinion-based forecasting; he is the author of the equally comprehensive book Long-Range Forecasting, which was published in 1978...In sum, Principles of Forecasting is a very handsome volume. It will be a welcome addition to any applied research library, and it should be kept near at hand by any statistician.' Journal of the Royal Statistical Society, Series D, The Statistician (forthcoming in 2003) (For the complete review, please check: forecastingprinciples.com) `... Armstrong's book goes beyond its stated goal of presenting the state of the art of forecasting research in the form of concrete principles; it sets the tone and direction for all future work in this area. The book has earned its place as the bible for forecasters and is a "must have" in every forecaster's library.' Journal of Marketing Research, XXXIX (2003)

About the Author

Professor Armstrong is the author of Long-Range Forecasting and he is a founder of the Journal of Forecasting, the International Journal of Forecasting, the International Institute of Forecasting and the International Symposium on Forecasting. For additional information on the book and on the Forecasting Principles Project, see the home page.

Product Details

• Hardcover: 864 pages
• Publisher: Springer; 1 edition (May 1, 2001)
• Language: English
• ISBN-10: 0792379306
• ISBN-13: 978-0792379300
• Product Dimensions: 10.3 x 7.2 x 2 inches
• Shipping Weight: 3.6 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #2,069,686 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

31 of 33 people found the following review helpful:

5.0 out of 5 stars Don't let a bad forecast ruin your whole decision, December 14, 2001

By 

Kesten Green ([e-mail]) (Wellington, New Zealand) - See all my reviews

This review is from: Principles of Forecasting - A Handbook for Researchers and Practitioners (International Series in Operations Research & Management Science) (Hardcover)

The subtitle of this book, A Handbook for Researchers and Practitioners, too narrowly defines the audience for Armstrong's new reference. Principles of Forecasting is, in fact, an indispensable resource for managers and professionals of every ilk. Forecasting is an integral part of decisions that we make and that are made for us. To be good decision makers and citizens we owe it to ourselves and others both to make our forecasts explicit and to examine the quality of those forecasts. This book gives the guidance to ensure that best practices are followed and to judge forecast quality after the fact

Principles of Forecasting is not a book that you will find in airport bookstores. It is not a popular management title that dishes-up the latest buzzwords. On the contrary, this book will give you knowledge to examine critically the fashions and fads, as well as the received wisdom, of management. And yet, despite being a serious work, the book is a joy to read at length, or to browse. I suspect many decision makers will tend to do the latter.

The Forecasting Dictionary is part of Principles of Forecasting and is a good place to start some directed browsing. For example, experienced decision makers will often rely on their intuition, even for important decisions. Is that a good idea? The Forecasting Dictionary has an entry for "intuition" that tells us, "... it is difficult to find published studies in which intuition is superior to structured judgment". Highlighted terms, such as "structured judgment" in the preceding passage, indicate that there is a separate Dictionary entry for the term. By following the highlighted terms and the references to the body of the book which are included in Dictionary entries, one can quickly pick up a useful understanding of a topic. Some entries are very detailed.

Following the intuition entry to the entry on structured judgement, one finds "role playing" as an approach to imposing structure on a forecasting problem. Role-play forecasting for conflict situations happens to be an interest of mine. There is a chapter on role-playing in Principles of Forecasting that provides evidence that the outcomes of role-plays by students, and other non- representative role-players, provide accurate forecasts of decisions in real conflicts. This is counter-intuitive given that the conflicts examined involved generals, chief executives, directors, and union leaders among others. Moreover, unaided judgment tends to do poorly by comparison. This has important implications for strategy development - after all, what use is a strategy that fails to forecast accurately how other parties will behave?

I keep my copy of Principles of Forecasting handy, refer to it often, and learn something new every time I do so. How many books could one say that of? A precious few. Congratulations to the authors on a unique and valuable work well executed.

22 of 25 people found the following review helpful:

5.0 out of 5 stars An Excellent Overview of Business Forecasting, July 5, 2001

By 

Daniel M. Byrd (Washington, DC USA) - See all my reviews

This review is from: Principles of Forecasting - A Handbook for Researchers and Practitioners (International Series in Operations Research & Management Science) (Hardcover)

Throughout my career, it seemed every five years or so, I briefly strayed from risk analysis into a closely related field, such as weather reporting or stock picking, just to see what others were doing. Most recently, I won a jackpot in return for the effort. I read J.Scott Armstrong's "Principles of Forecasting: A Handbook for Researchers and Practitioners."

Risk analysis has dealt more with subjects like natural and technological disasters. Business forecasting resembled risk analysis in several ways, but over the years, enterprise and capital markets accumulated much more extensive data. Social scientists studied the process of (and procedures for) forecasting with financial data intensively. Small wonder, as poor forecasting often led to costly disasters.

The authors wrote the Handbook in clear, coherent prose. It assembled 29 articles by 40 leading experts into an excellent book with 18 chapters. Armstrong, the editor (and clearly the instigator) created a hierarchical framework that described the relationships between different kinds of forecasting information, beginning with either judgmental or statistical sources. "Principles of Forecasting" illustrated this framework in an often repeated diagram.

The framework contributed to a coherent structure. Each chapter described one compartment within the framework. Each had an introduction that described the limitations and uses of a source of data used by forecasters. Each article also started with an abstract. Thus, a reader could quickly survey all of forecasting by skimming through the Handbook and reading either the article abstracts or the chapter introductions.

Instead of reading the text sequentially, the framework and the Handbook's structure also allowed finding a specific article (or a topic of interest within an article) quickly, yet staying oriented to the overall subject. Thus, "Principles of Forecasting" served a handy reference text. The organization and a competent index sped this application.

Many articles were excellent. None were less than very good. The articles concentrated on principles within subdomains of forecasting, which the Handbook emphasized by setting the principles apart in bullet format and bold text. The articles had a common format, which included two useful implication sections, separately for practitioners and for researchers. The articles also had overall summaries, and references to the literature. The authors edited each other's articles, which imposed both high quality and consistency on the Handbook. In addition, an extensive group of outside experts reviewed the articles. This huge effort showed in both dense information content and readability of the articles.

Similarly, the Handbook contained a separate and marvelous "Forecasting Dictionary" toward the end, which allowed quick reference to (and understanding of) separate ideas involved in competent forecasting. In another separate section toward the end of the Handbook, a "Forecasting Standards Checklist" gathered all of the principles from the separate articles and condensed them into a very useful guide.

"Principles of Forecasting" appeared comprehensive in its coverage. The authors wrote it as an explanation of a field, instead of a group of individual articles about related subjects. An introduction and a summary at the beginning and end of the book, also helped orient me to the overall subject of forecasting and to the need for principles. I thought that the Handbook reflected the consistent objective of a group of experts to interpret and explain forecasting. So, I will recommend it as a textbook for classroom use.

"Principles of Forecasting" is not for everyone. It is an expert text. However, for persons involved in (or hoping to become involved in) forecasting or its allied and subsidiary fields, such risk analysis or econometrics, it will prove indispensable.

15 of 17 people found the following review helpful:

5.0 out of 5 stars Guidelines for Developers, Researchers, and Practitioners, November 22, 2001

By 

Paul Sheldon Foote (Fullerton, CA USA) - See all my reviews

This review is from: Principles of Forecasting - A Handbook for Researchers and Practitioners (International Series in Operations Research & Management Science) (Hardcover)

Principles of Forecasting is not a collection of articles describing basic forecasting methods. Instead, 40 authors have used a common format of identifying if-then principles and the support for those principles. Some other common formats of the chapters are: (1) limitations (2) implications for practitioners (3) implications for researchers.

The final chapter of this book contains 139 forecasting principles...

An example of a forecasting principle is: “13.25 Use multiple measures of accuracy”. A primary use for such principles would be as checklists for software developers, researchers, and practitioners to be sure that their work is complete to this level of detail. These are important general principles. Forecasters will need to use other references for the details of forecasting methods.

The Web site for this book is a very valuable resource for forecasters. Some of the resources are: (1) forecasting dictionary [Enter a forecasting term and the Web site returns a definition.] (2) links to forecasting software sites (3) links to forecasting books and reviews (3) links to bibliographies, abstracts, and (for subscribers) full text papers (4) links to conferences on forecasting (5) links to Web sites related to forecasting.