forecasting bias

Forecasting bias occurs when predictions systematically favor one outcome over others due to underlying assumptions, personal beliefs, or misinterpretation of data. This can lead to overestimating or underestimating future events. For example, if a manager consistently predicts sales growth without considering market downturns, their forecasts may be overly optimistic. Recognizing and mitigating forecasting bias is essential for making more accurate decisions and developing realistic strategies, as it helps ensure that potential risks and uncertainties are adequately acknowledged in the planning process.