The Promise of Generative AI in Forecast Value Added Analysis

The Journal of Business Forecasting recently published an article by First Analytics’ titled “The Promise of Generative AI in Forecast Value Added Analysis.”

The article explores the potential of integrating generative AI, specifically large language models (LLMs), into Forecast Value Added (FVA) analysis.  FVA has long been a key methodology for assessing the effectiveness of demand forecasting processes.  The introduction of generative AI opens up new opportunities for enhancing forecasting accuracy and efficiency by automating reporting, summarizing complex data, and supporting decision-making through interactive AI assistants.

The article also discusses current challenges in integrating LLMs into FVA analysis, such as their limited ability to process large volumes of data at once, variability in responses, and occasional inaccuracies in contextual understanding.  However, it highlights recent advancements and practical solutions to address these issues, such as expanding context windows, employing techniques like Retrieval Augmented Generation, and fine-tuning models for domain-specific tasks.

The article can be accessed on the publisher’s website.

You can also read more about our forecasting and supply chain offerings as well as selected sales and demand planning use cases.

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