Intelligent system to support judgmental business forecasting: The case ofestimating hotel room demand

Forecasting is an instrumental tool for strategic decision-making in any bu siness activity. Good forecasts can reduce the uncertainty about the future and, hence, help managers make better decisions. Virtually all statistical forecasting techniques depend on the continuity of historical data and tim e series and may not predict a discontinuous change in the business environ ment. Often times, this discontinuity is known to managers who then must re ly on their judgment to make forecast adjustments. In this paper, we discus s the role of judgmental forecasting and take the problem of estimating fut ure hotel room demand as a practical business application. Next, we propose IS-JFK: an intelligent system to support judgmental forecasting and knowle dge of managers. To account for vagueness in the knowledge elicited from ma nagers and the approximate nature of their reasoning, the system is built a round fuzzy IF-THEN rules and uses fuzzy logic for decision inference. IS-J FK supports two methods for forecast adjustments: 1) a direct approach and 2) an approach based on fuzzy intervention analysis. Actual data from a hot el property are used in some case-scenario simulations to illustrate the me rits of the intelligent support system.