AI Forecasting
What is AI Forecasting?
AI Forecasting describes the use of artificial intelligence to predict future developments. Typically, historical data is analysed, patterns are identified and probabilities for future events are calculated from this.
The central question of AI Forecasting is: "What is likely to happen?"
Typical areas of application
- Sales and turnover forecasts
- Tax revenue estimates
- Demand forecasts
- Energy or resource requirements
- Demographic developments
Methodological basis
- Time series models
- Regression
- Machine learning
- Neural networks
- Monte Carlo simulation
- Scenario analysis
The result is always a probability statement about the future. AI forecasting is therefore predictive, not prescriptive.
Why forecasting alone is not enough
A forecast tells you what is likely to happen. However, it does not tell you which combination of decisions is optimal under given constraints.
Example of a city budget:
- 50 possible projects
- 81 million budget
- 220 million total investment requirement
- legal, political or technical constraints
This does not pose a forecasting problem. This creates a combinatorial decision problem with 2N possible project combinations.
StratePlan: From AI forecasting to decision optimisation
StratePlan is not a forecasting system. StratePlan does not answer the question "What will happen?", but rather the question: "Which decision maximises target variable X under constraints Y?"
This is a normative optimisation problem in a multidimensional decision space.
The difference at a glance
| Dimension | AI Forecasting | StratePlan |
|---|---|---|
| Primary question | What will happen? | What is the best decision? |
| Logic | Predictive | Normative |
| Output | Probabilities / scenarios | Global optimal combination |
| Problem type | Time and trend modelling | Combinatorial optimisation (2N) |
Can AI Forecasting be input for StratePlan?
Yes. Forecasts – for example, on revenue and cost developments – can be incorporated into the optimisation as parameters.
However, StratePlan itself is not a forecasting model. It calculates the globally optimal solution from all permissible decision combinations – transparently, in compliance with restrictions and ex ante.
From forecasting to optimisation
AI forecasting predicts the future. StratePlan optimises decisions.
If you want to know not only what is likely to happen, but also which decision will generate the highest ROI or impact under budget and constraints, you need decision intelligence.
