Forecasting Consequences Of Business Decisions: A Review Of Haran And Moore (2014)

Importance of Forecasting

Dsicuss about the Transforming The Role Of Management Accountants.

The article by Haran and Moore, (2014) deals with the proper ways for the prediction of the consequences of the decisions that are taken by the concerned management of the organization. According to the authors, the forecast of the consequences of any given business decision forms the basis of the concerned business decision. The author suggests that all the organizations tend to forecast the conditions that might follow the implementation of the business decision that is taken by the concerned management of the organization. In the concerned article, the authors deal with the uncertainty factors that are involved in the forecasting of the consequences of the decisions that the concerned management might plan on implementing in the concerned organization. The following report deals with the review of the article by Haran and Moore (2014) that deals with the uncertainty factors that are involved in the forecasting of the consequences of the business decisions and the commonest errors that are observed in the activity.

The topic on which the authors have based their article is the uncertainty that is involved in the forecasting that is needed for deciding on the implementation of the decision that is taken by the concerned management of the organization. The authors argue that forecasting is present in every single activity that is undertaken by the people in their daily lives. The most common approach that is followed for the forecasting process is the method of the point-prediction. This approach attempts a precise guess on the future events that might ensue as a result of the decisions that are taken by the concerned management of the organization. The authors opine that the most basic mistake that is made by the various companies is questioning the concerned people with the incorrect forecasting questionnaire. The authors opine that the method of point forecasting, the most widely used manner of forecasting, is one of the futile ways of forecasting. The range forecast is, according to the authors is a better approach to deal with the methods of the forecasting the consequences of the concerned business decision. The authors suggest that the range forecasting is one of the methods of forecasting that leaves some areas for the errors of the prediction on the concerned issue. The authors of the concerned article deal with the uncertainties that are involved in the matters that pertain to the forecasting of the consequences of the various business decisions that the management of an organization might plan to implement.

SPIES Method for Predicting Consequences

The article in discussion might help the authors and the concerned readers of the article to know more about the SPIES method for eliciting the forecasting of the consequences of the various business decisions that the concerned management has been planning to implement. SPIES is an acronym used for the Subjective Probability Interval EStimates. This method helps the concerned management with providing the simpler ways in the production of the forecasts and the predictions related to the business decisions. The predictions generated by this method helps the concerned management of the organization by providing a greater amount of the flexibility to the concerned decision maker by producing the forecasts that display greater accuracy. The authors explain that the SPIES method does consist of various principles. According to the authors, the first principle advises simpler forecasts. The authors further advise that the forecasters or the predictors to consider all the aspects of the implementation of the decision. This might help in the prevention of the conditions wherein the number of the scenarios might get overlooked thereby helping in the increment in the accuracy of the predictions. The concerned management is also advised to use the graphical presentation of the total distribution before commencing on the estimate of the same. The forecasters are advised to form the likelihood judgments on the basis of the format dependence research. The final step suggested by the authors is the weighing of the possible results against each other in order to produce the precise amount of the probable outcomes of the implementation of the concerned business outcomes

The research conducted by the authors for the composition of the article majorly constitutes of the ways in which the SPIES method would be functioning. The authors explain the functionality of the method by stating the fact that this method consists of the various graphical interfaces that might help the concerned forecaster with the complete range of the possible consequences of the concerned business decision. This total range is distributed into various bins that are allocated certain value ranges by the concerned forecaster. The forecasters generally assign certain values to each of the bins. The forecaster assigns greater points to the bins that he feels might be more likely to generate outcomes. The forecaster might assign a zero value to the bin that he might consider to be the least likely to collect the concerned responses from the concerned members of the concern. This helps the attentive readers to put forth the view that these bins are almost akin to the probability points related to the activity of the forecasting. The forecaster is observed to make a revelation of the subjective probability distribution that is related to the consequences of the various business decisions that tend to be implemented in the concerned organization. This helps in forming an estimate of the various probabilities based on the rate of probability that has been observed in the graphical representation.

Benefits of Implementing SPIES Method

The researches and the studies that were conducted by the authors of the concerned article helps the various forecasters by introducing the various methods that might help them to forecast the consequences of the implementation of the various business decisions in the concerned organizations. The SPIES method as proposed by the authors in the concerned article helps the concerned forecaster as well as the concerned management of the concern to make an estimate on the probable results, the most probable value range that has been identified by the concerned forecaster. This also helps in the identification of the least likely value range as determined by the forecaster and also put forth certain areas that the concerned organizational management might need to bring about a reduction of the investment of the resources. The SPIES method that is proposed by the authors might help in the creation of the confidence intervals that might be useful for the concerned decision maker. This method tends to provide the concerned decision maker with the high levels of the flexibility as opposed to the various other formats that are used for the forecasting the consequences of the implementation of the various business decisions by the concerned management of the organization.

The article tends to be of huge importance to the various members of the management teams of the various organizations in the matters that pertain to the prediction or the forecasting of the various consequences that might follow the implementation of the various business decisions on the concerned staff of the organization. The management of the various organizations might be benefitted immensely from the implementation of the proposed SPIES method of the forecasting. The method that has been proposed by the authors in this article is observed to be very flexible and thus might assist the concerned management of the organizations to gain insight on the various ranges of the estimates from the same SPIES report and thus helps in the reduction of the efforts that had to be invested by the concerned forecaster in the construction of the other report in order to compute the predictions based on the factors that are stressed upon by the concerned member of the management of the concerned organization. The proposed method of forecasting also helps the concerned management to form an idea of the total probability distribution that is required for the purpose of the planning. The SPIES method of forecasting is considered to be better than the various other forecasting methods that might be implemented by the various organizations for the prediction of the consequences that might result from the implementation of the various business orders.

Conclusion

Thus, from the article review discussed above, it might safely be concluded that the proposed prediction method of SPIES might help the various management teams of the organizations to forecast or predict the consequences of the business decisions that they might implement. This article might be of great help to the concerned management as well as the various forecasters or predictors in the organization. The authors have also made it a point to maintain the credibility of the article by incorporating examples of the SPIES methods and the outcomes that have been received from the concerned reports. The article also incorporates within itself the various shortcomings of the suggested method of performing the forecasts on the various consequences that might follow from the implementation of the various business decisions by the concerned body of the management of the organization.

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