Forecasting commodities : - A study of methods, interests and preception

Abstract: This study aims to investigate reasons for variation in accuracy between different forecast methods by studying the choice of methods, learning processes, biases and opinions within the firms using them; enabling us to provide recommendations of how to improve accuracy within each forecast method. Eleven Swedish and international companies that are regularly forecasting commodity price-levels have been interviewed. Since there is a cultural aspect to the development of forecast methods; the authors have chosen to conduct a qualitative study, using a semi-structured interview technique that enables us to illustrate company-specific determinants. The results show that choice of methods, learning processes, biases and opinions all have potentially substantial implications on the accuracy achieved. The phenomena’s individual implication on accuracy varies amongst method-group.