Cross Validated is a question and answer site for people interested in statistics, machine learning, data analysis, data mining, and data visualization. Join them; it only takes a minute:

Sign up
Here's how it works:
  1. Anybody can ask a question
  2. Anybody can answer
  3. The best answers are voted up and rise to the top

What are the differences between planning, prediction and forecasting in relation to data mining and business intelligence?

It would be great if you could provide some concrete examples of these three concepts.

I don't have enough experience to understand it.

share|improve this question
up vote 2 down vote accepted

As @IrishStat has hinted, precise distinctions between these terms are difficult given a variety of lay and professional usages. Nevertheless we can try. My perspective here is one broadly statistical view, as there is no sense in which these terms are limited to data mining or business intelligence.

  1. Planning is about the future: deciding what to do and how to do it. But planning need not be statistical in any strong sense. Simple examples include planning home improvements or a party or a wedding. Nevertheless planning of future activities by any large business, institution or government would, or should, usually include some statistical analysis of quantitative elements (e.g. employment, expenditure, sales).

  2. Prediction in statistics need not be about the future at all, as we often talk about the predictive ability of a model regardless of whether time series are being analysed. But the lay sense of prediction does usually imply the future. There is no contradiction here, as any prediction should be a logical implication of a model fitted to the data. (The transition between lay and professional senses is captured by the old joke that prediction is difficult, especially about the future. Niels Bohr is often credited with this remark.)

  3. Forecasting does usually imply prediction of the future, either conditionally or unconditionally. It often now involves fitting a statistical model to time series, but over history many methods have been tried. Most of us have some ability to forecast immediate weather from a look at the sky without doing any statistics or meteorological analysis, for example.

In a more formal context, it is best to look carefully for definitions of prediction and forecasting towards the beginning of time series texts. (Also look for the idea of projection.)

share|improve this answer

There is no answer to your question due to semantics as many lay people use these terms interchangeably BUT in my opinion:

planning = what you would like to happen based upon some top level subjective guidance a.k.a goals

prediction = what the statistics tell you about the future if you do nothing different

forecasting = what the statistics tell you about the future given your expectations/plans about causal variables (price/promotion etc )

share|improve this answer

Your Answer


By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.