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Models to forecast sales demand often deliver erroneous results because they fail to incorporate the right data or use the right algorithms. Incorrect forecasts can increase costs significantly if they lead to excess inventory, shortages and waste. Advanced analytics can help companies build better, smarter forecasts and reduce forecasting errors. The trick is understanding from the front line what factors really determine customer behavior.
Cesar Brea is a partner with Bain & Company and is based in the firm’s Boston office. Rodrigo Mayo is a partner with Bain and is based in Mexico City.
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