Better Sales Forecasting: Why the Crowd Outperforms the “Expert with the Eye”

Barbara Mellers, Marketing, The Wharton School, and Lyle Ungar, Penn Engineering

Abstract: The ability to predict consumer preferences for new fashions by clothing manufacturer executives seems rather low. This is confirmed by secondary data on inventory markdowns and our pilot interviews with major manufacturers.

This study seeks to document forecast accuracy by executives across functions and levels in the organization. We then want to document consumer forecast accuracy and to both compare forecast and build a combined model. We now have the cooperation of a major multi-brand manufacturer and will have data for two brands across two selling seasons. Completion of the study will be when all sales data are available in late 2017.