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:
1️⃣ 𝗢𝘃𝗲𝗿𝗰𝗼𝗻𝗳𝗶𝗱𝗲𝗻𝗰𝗲 𝗕𝗶𝗮𝘀:
Experienced planners may think they have it all figured out,
but research shows they may be even 𝗺𝗼𝗿𝗲 susceptible
to overconfidence than novices.
In fact, demand planners were found to be over 10% more likely to be overconfident than non-demand planners.
2️⃣ 𝗙𝗿𝗮𝗺𝗶𝗻𝗴 𝗘𝗳𝗳𝗲𝗰𝘁:
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
• well-defined decision tree and
• detailed choice architecture
more important than ever.
3️⃣ 𝗚𝗮𝗺𝗯𝗹𝗲𝗿’𝘀 𝗙𝗮𝗹𝗹𝗮𝗰𝘆:
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.
4️⃣ 𝗣𝗲𝗿𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗗𝗶𝗿𝗲𝗰𝘁𝗶𝗼𝗻𝗮𝗹 𝗕𝗶𝗮𝘀:
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.
5️⃣ 𝗖𝗹𝘂𝘀𝘁𝗲𝗿 𝗜𝗹𝗹𝘂𝘀𝗶𝗼𝗻 𝗕𝗶𝗮𝘀:
Don’t be fooled by random data distributions –
the Cluster Illusion Bias can cause planners to mistake them
for systemic or non-random patterns.