2,828 research outputs found

    Demand Forecasting: Evidence-based Methods

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    We looked at evidence from comparative empirical studies to identify methods that can be useful for predicting demand in various situations and to warn against methods that should not be used. In general, use structured methods and avoid intuition, unstructured meetings, focus groups, and data mining. In situations where there are sufficient data, use quantitative methods including extrapolation, quantitative analogies, rule-based forecasting, and causal methods. Otherwise, use methods that structure judgement including surveys of intentions and expectations, judgmental bootstrapping, structured analogies, and simulated interaction. Managers' domain knowledge should be incorporated into statistical forecasts. Methods for combining forecasts, including Delphi and prediction markets, improve accuracy. We provide guidelines for the effective use of forecasts, including such procedures as scenarios. Few organizations use many of the methods described in this paper. Thus, there are opportunities to improve efficiency by adopting these forecasting practices.Accuracy, expertise, forecasting, judgement, marketing.

    Long-Term Load Forecasting Considering Volatility Using Multiplicative Error Model

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    Long-term load forecasting plays a vital role for utilities and planners in terms of grid development and expansion planning. An overestimate of long-term electricity load will result in substantial wasted investment in the construction of excess power facilities, while an underestimate of future load will result in insufficient generation and unmet demand. This paper presents first-of-its-kind approach to use multiplicative error model (MEM) in forecasting load for long-term horizon. MEM originates from the structure of autoregressive conditional heteroscedasticity (ARCH) model where conditional variance is dynamically parameterized and it multiplicatively interacts with an innovation term of time-series. Historical load data, accessed from a U.S. regional transmission operator, and recession data for years 1993-2016 is used in this study. The superiority of considering volatility is proven by out-of-sample forecast results as well as directional accuracy during the great economic recession of 2008. To incorporate future volatility, backtesting of MEM model is performed. Two performance indicators used to assess the proposed model are mean absolute percentage error (for both in-sample model fit and out-of-sample forecasts) and directional accuracy.Comment: 19 pages, 11 figures, 3 table

    Tornado outbreak false alarm probabilistic forecasts with machine learning

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    Tornadic outbreaks occur annually, causing fatalities and millions of dollars in damage. By improving forecasts, the public can be better equipped to act prior to an event. False alarms (FAs) can hinder the public’s ability (or willingness) to act. As such, a probabilistic FA forecasting scheme would be beneficial to improving public response to outbreaks. Here, a machine learning approach is employed to predict FA likelihood from Storm Prediction Center (SPC) tornado outbreak forecasts. A database of hit and FA outbreak forecasts spanning 2010 – 2020 was developed using historical SPC convective outlooks and the SPC Storm Reports database. Weather Research and Forecasting (WRF) model simulations were done for each outbreak to characterize the underlying meteorological environments. Parameters from these simulations were used to train a support vector machine (SVM) to forecast FAs. Results were encouraging and may result in further applications in severe weather operations

    Forecasting for Marketing

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    Research on forecasting is extensive and includes many studies that have tested alternative methods in order to determine which ones are most effective. We review this evidence in order to provide guidelines for forecasting for marketing. The coverage includes intentions, Delphi, role playing, conjoint analysis, judgmental bootstrapping, analogies, extrapolation, rule-based forecasting, expert systems, and econometric methods. We discuss research about which methods are most appropriate to forecast market size, actions of decision makers, market share, sales, and financial outcomes. In general, there is a need for statistical methods that incorporate the manager's domain knowledge. This includes rule-based forecasting, expert systems, and econometric methods. We describe how to choose a forecasting method and provide guidelines for the effective use of forecasts including such procedures as scenarios.forecasting, marketing

    A new paradigm for medium-range severe weather forecasts: probabilistic random forest-based predictions

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    Historical observations of severe weather and simulated severe weather environments (i.e., features) from the Global Ensemble Forecast System v12 (GEFSv12) Reforecast Dataset (GEFS/R) are used in conjunction to train and test random forest (RF) machine learning (ML) models to probabilistically forecast severe weather out to days 4--8. RFs are trained with 9 years of the GEFS/R and severe weather reports to establish statistical relationships. Feature engineering is briefly explored to examine alternative methods for gathering features around observed events, including simplifying features using spatial averaging and increasing the GEFS/R ensemble size with time-lagging. Validated RF models are tested with ~1.5 years of real-time forecast output from the operational GEFSv12 ensemble and are evaluated alongside expert human-generated outlooks from the Storm Prediction Center (SPC). Both RF-based forecasts and SPC outlooks are skillful with respect to climatology at days 4 and 5 with degrading skill thereafter. The RF-based forecasts exhibit tendencies to underforecast severe weather events, but they tend to be well-calibrated at lower probability thresholds. Spatially averaging predictors during RF training allows for prior-day thermodynamic and kinematic environments to generate skillful forecasts, while time-lagging acts to expand the forecast areas, increasing resolution but decreasing objective skill. The results highlight the utility of ML-generated products to aid SPC forecast operations into the medium range
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