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What you should know about correlation and causationSupply Chain Planning
Just because you see patterns doesn’t mean you should make your business decisions around them. It’s easy to find connections and mix up correlation and causation, so do you research and don’t mix them up. The Institute of Business Forecasting and Planning said, “We confuse coincidence with correlation and correlation with causality.” Remember, knowing the difference between correlation and causation can make a huge impact on your success!
Avoid The Correlation/Causation Trap
Newspaper revenue and Sears’ revenue are only an obscure correlation much like linking ice cream sales to the murder rate in New York City.With poor planning we may see a correlation between forecast error and missed sales, or between long supplier lead times and excess inventory – in both scenaRead the article