Heuristics vs. Biases in S&OP: an Insight into the Decision Making Process of Emotionally Involved Planners

Valeria Belvedere, Paul Goodwin

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In S&OP, planners have to decide how much to produce on the basis of expected future sales. Such forecasts are often made through a process of judgmental adjustment on the “anchor” provided by a statistical algorithm. However, these adjustments are often inefficient. This paper aims at testing through an experiment whether the involvement of the forecasters with the product category and their emotional reaction to particular products can drive their accuracy. It was found that forecasters who liked particular products tended to suffer from significant optimism bias. However, the bias was reduced when forecasters also had high involvement with the product category.
Original languageEnglish
Title of host publication20th Euroma Conference - Operations Management at the Heart of the Recovery
Pages1-10
Number of pages10
Publication statusPublished - 2013
Event20th Euroma Conference - Operations Management at the Heart of the Recovery - Dublino
Duration: 7 Jun 201312 Jun 2013

Conference

Conference20th Euroma Conference - Operations Management at the Heart of the Recovery
CityDublino
Period7/6/1312/6/13

Keywords

  • Experiment
  • Forecasting
  • Planning

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