Format of Original
International Research Journal of Applied Finance
Rule-based Forecasting (RBF) has emerged to be an effective forecasting model compared to well-accepted benchmarks. However, the original RBF model, introduced in1992, incorporates 99 production rules and is, therefore, difficult to apply judgmentally. In this research study, we present a core rule-set from RBF that can be used to inform both judgmental forecasting practice and pedagogy. The simplified rule-set, called coreRBF, is validated by asking forecasters to judgmentally apply the rules to time series forecasting tasks. Results demonstrate that forecasting accuracy from judgmental use of coreRBF is not statistically different from that reported from similar applications of RBF. Further, we benchmarked these coreRBF forecasts against forecasts from (a) untrained forecasters, (b) an expert system based on RBF, and (c) the original 1992 RBF study. Forecast accuracies were in the hypothesized direction, arguing for the generalizability and validity of the coreRBF rules.
Adya, Monica and Lusk, Edward J., "Rule Based Forecasting [RBF] - Improving Efficacy of Judgmental Forecasts Using Simplified Expert Rules" (2013). Management Faculty Research and Publications. 151.