What Is Probabilistic Forecasting?
Demand for your products can be as unpredictable as the weather, and in uncertain demand environments, probabilistic forecasting is the only accurate method to predict outcomes.
So what is probabilistic forecasting, and how does it work?
Let’s start with traditional deterministic forecasting. With this method, you calculate a single number outcome based on historical averages. Because no one can predict the future with 100% accuracy, you can bet your number will almost always be wrong.
ToolsGroup’s probabilistic forecasting is different. A ToolsGroup forecast actually knows it could be wrong and shows you by how much. It takes uncertainty into account and provides all the potential outcomes as probabilities that may occur. This way, your odds of getting it right are much higher.
Take the example of a weather forecast. A yes or no chance of rain is likely to leave you soaking wet. A richer picture of potential outcomes helps you make a better plan for your day.
Planners trust ToolsGroup’s forecast because it’s reliable and provides a true reflection of real world variability so you can guarantee service to customers.