Judgmental Forecasting: Cognitive Reflection and Decision Speed

Moritz, Brent; Siemsen, Enno; Kremer, Mirko

doi:10.1111/poms.12105

Cited by 83 publications

(52 citation statements)

References 61 publications

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“…Consistent with prior literature (Moritz et al. ), we note while some factors like intelligence and risk literacy were correlated with the CRT, the CRT scores were the best predictor of supply chain performance; detailed analyses of these additional measures is in subsection . Additionally, while participants were from three different universities, we note that the same website, game screens, and tools were used across all three universities.…”

Section: Methodssupporting

confidence: 88%

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Narayanan

Moritz

2015

Production and Operations Management

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Supply chain performance often depends on the individual decisions of channel members. Even when individuals have access to relevant information, order variation tends to increase when moving up the supply chain, a phenomenon known as the bullwhip effect. While prior research has investigated several structural/environmental factors which can mitigate the bullwhip effect, the underlying behavioral factors contributing to it are an open question. Using a production and distribution decision‐making simulation representing a four‐stage serial supply chain, we find that the cognitive profile of decision makers contributes to the bullwhip effect. We found that the specific decision tendency to underweight the supply line is linked to an individual's level of cognitive reflection. Furthermore, performance differs for entire supply chains and for specific echelons, and holds under standard mitigation efforts. The findings have implications for supply chain design, education, and industry.

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Section: Methodssupporting

confidence: 88%

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Narayanan

Moritz

2015

Production and Operations Management

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“…Both can keep specialist referrals in check by imposing a time cost on the referring provider. Experimental studies suggest that forced reflection can result in better decision-making (Di Stefano et al, 2015), including improved allocation of resources (Moritz, Hill, & Donohue, 2013;Moritz, Siemsen, & Kremer, 2014). Instead, justification adds the step of mental reflection to the referral process.…”

Section: The Role Of Gatekeepers and The Impact Of Reflectionmentioning

confidence: 99%

“…According to past research, reflection should lead to improved allocation of resources (Moritz et al, 2013;Moritz et al, 2014), such as more appropriate use of medical tests. ED physicians, when interviewed about strategies for reducing length of stay, said that they order fewer services when they take the time to decide if a service is necessary Song, Tucker, Murrell, & Vinson, 2015).…”

Section: Reflectionmentioning

confidence: 99%

The value of process friction: The role of justification in reducing medical costs

Jaeker

Tucker

2019

J of Ops Management

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We study the role of process friction in increasing efficiency of service provisions. We examine one potential lever for reducing the provision of discretionary services: “justification”—an otherwise non‐value‐added process step that introduces process friction by forcing workers to explain the rationale for requesting an optional service. We exploit the presence—and absence—of a justification step in the ultrasound (US) ordering process at two emergency departments (EDs). We find that patients with abdominal pain are less than half as likely to receive an US when there is a justification step compared to when there is not. Additionally, we find a spillover effect: other diagnostic tests are also ordered less frequently. The decrease in testing reduces the average length of stay of the patients, and reduces testing costs by more than $200,000, with no decrease in quality. We show that two mechanisms underlie these results: (a) justification reduces clinicians' available time, and (b) justification forces clinicians to reflect on a patient's need for service. Our paper contributes to recent theory on friction and reflection as drivers of efficiency in services. We show that justification can serve as an effective lever for reducing medical tests—and costs—without negatively impacting quality.

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“…It may be that the participants were motivated to put more effort into considering the available information; indeed, those with a high involvement with a product category may have been genuinely interested in patterns of past sales. The willingness to put more effort into a task is likely to be associated with analytic (system 2) rather than intuitive (system 1) thinking, thereby reducing the influence of biases associated with intuition (Kahneman, 2011;Moritz, Siemsen & Kremer, 2014). This may have accounted for the greater accuracy, but further research, tracing the process of arriving at forecasts, would be needed to confirm this.…”

Section: Discussionmentioning

confidence: 89%

The influence of product involvement and emotion on short-term product demand forecasting

Belvedere

Goodwin

2017

International Journal of Forecasting

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a b s t r a c tSales forecasters in industries like fast-fashion face challenges posed by short and highly volatile sales time series. Computers can produce statistical forecasts, but these are often adjusted judgmentally to take into account factors such as market intelligence. We explore the effects of two potential influences on these adjustments: the forecaster's involvement with the product category and their emotional reactions to particular products. Two forecasting experiments were conducted using data from a major Italian leather fashion goods producer. The participants' judgmental adjustments tended to lower the forecast accuracy, but especially when the participants had strong preferences for particular products. This appeared to result from a false consensus effect. The most accurate forecasts were made when the participants had no knowledge of the product and only received time series information, though a high level of involvement with the product category also led to a greater accuracy.

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Judgmental Forecasting: Cognitive Reflection and Decision Speed

Cited by 83 publications

References 61 publications

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

The value of process friction: The role of justification in reducing medical costs

The influence of product involvement and emotion on short-term product demand forecasting

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