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2017 | 27 | 1 | 5-19
Article title

Forecast value added (FVA) analysis as a means to improve the efficiency of a forecasting process

Authors
Content
Title variants
Languages of publication
EN
Abstracts
EN
A praxeological approach has been proposed in order to improve a forecasting process through the employment of the forecast value added (FVA) analysis. This may be interpreted as a manifestation of lean management in forecasting. The author discusses the concepts of the effectiveness and efficiency of forecasting. The former, defined in the praxeology as the degree to which goals are achieved, refers to the accuracy of forecasts. The latter reflects the relation between the benefits accruing from the re-sults of forecasting and the costs incurred in this process. Since measuring the benefits accruing from a forecasting is very difficult, a simplification according to which this benefit is a function of the fore-cast accuracy is proposed. This enables evaluating the efficiency of the forecasting process. Since im-proving this process may consist of either reducing forecast error or decreasing costs, FVA analysis, which expresses the concept of lean management, may be applied to reduce the waste accompanying forecasting.
Year
Volume
27
Issue
1
Pages
5-19
Physical description
Contributors
  • Lodz University of Technology, Department of Management, ul. Piotrkowska 266, 90-361 Łódź, Poland, filip.chybalski@p.lodz.pl
References
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  • ROTHARB M.N., Economic controversies, Ludwig von Mises Institute, Auburn, Alabama 2011.
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Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.desklight-3496c043-c7f6-4887-9419-21cc74b13637
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