Forecast by analogy explained

Forecast by analogy is a forecasting method that assumes that two different kinds of phenomena share the same model of behaviour. For example, one way to predict the sales of a new product is to choose an existing product which "looks like" the new product in terms of the expected demand pattern for sales of the product.

"Used with care, an analogy is a form of scientific model that can be used to analyze and explain the behavior of other phenomena."^[1]

According to some experts, research has shown that the careful application of analogies improves the accuracy of the forecast.^[2]

See also

• Case-based reasoning

Further reading

• Forecasting the Progress of Technology . Major Joseph P. Martino . Air University Review . March–April 1969.

Notes and References

1. Book: Future Ready: How to Master Business Forecasting . 978-0-470-74705-6 . John Wiley & Sons . 287. 2010-01-11 .
2. Structured analogies for forecasting . Kesten C. Greene and J. Scott Armstrong . Interfaces . 23 . 3 . 365–376 . 2007 . 10.1016/j.ijforecast.2007.05.005.