The Value of our Forecasts.
Abstract
Two simple cost-benefit models are presented. One model evaluates the cost effectiveness of forecast service in terms of the benefit derived by strict adherence to a strategy of acting solely on the basis of forecasts in preference to acting solely on the basis of existing weather. The other model evaluates the marginal cost effectiveness of our forecasts in terms of the benefit derived by subscribing to AWS service in preference to a service based on persistence forecasts. Two relationships are derived which express the savings per forecast and marginal savings per forecast in terms of measures of forecast performance. It is shown that the percentage increase in cost effectiveness and marginal cost effectiveness can be significantly greater than the percentage increase in performance. It is also demonstrated that a small increase in forecast performance can result in a significant increase in cost effectiveness. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 24, 1972
- Accession Number
- AD0753683
Entities
People
- Richard L. Walterscheid