Unmasking Biases: Navigating the Hidden Pitfalls in Demand Planning
Would love to hear if you can share any bias that you may have come across lately.
Some of the most surprising biases that could be sabotaging your demand planning:
1๏ธโฃ ๐ข๐๐ฒ๐ฟ๐ฐ๐ผ๐ป๐ณ๐ถ๐ฑ๐ฒ๐ป๐ฐ๐ฒ ๐๐ถ๐ฎ๐:
Experienced planners may think they have it all figured out,
but research shows they may be even ๐บ๐ผ๐ฟ๐ฒ susceptible
to overconfidence than novices.
In fact, demand planners were found to be over 10% more likely to be overconfident than non-demand planners.
2๏ธโฃ ๐๐ฟ๐ฎ๐บ๐ถ๐ป๐ด ๐๐ณ๐ณ๐ฒ๐ฐ๐:
The way data is presented
can greatly influence decision-making, and
demand planning is no exception.
The Framing Effect can cause planners to alter their opinions based on how the data is framed,
making a
โข well-defined decision tree and
โข detailed choice architecture
more important than ever.
3๏ธโฃ ๐๐ฎ๐บ๐ฏ๐น๐ฒ๐ฟ’๐ ๐๐ฎ๐น๐น๐ฎ๐ฐ๐:
Just because an event has occurred in the past,
it doesn’t mean it’s more or less likely to happen in the future.
The Gambler’s Fallacy can cause planners to make erroneous assumptions about probability and statistics.
4๏ธโฃ ๐ฃ๐ฒ๐ฟ๐๐ถ๐๐๐ฒ๐ป๐ ๐๐ถ๐ฟ๐ฒ๐ฐ๐๐ถ๐ผ๐ป๐ฎ๐น ๐๐ถ๐ฎ๐:
This bias causes individuals to
consistently interpret events through
an unjustifiably positive or negative lens, and
can be amplified by other biases such as the Framing Effect.
5๏ธโฃ ๐๐น๐๐๐๐ฒ๐ฟ ๐๐น๐น๐๐๐ถ๐ผ๐ป ๐๐ถ๐ฎ๐:
Don’t be fooled by random data distributions –
the Cluster Illusion Bias can cause planners to mistake them
for systemic or non-random patterns.