Prophet

How do you update your opinion when you receive new evidence? If your answer is ‘with data,’ congratulations: you’ve been practicing Bayesianism for 260 years without knowing it. This is the story of an 18th-century reverend whose posthumous essay laid the foundation for machine learning, spam filters, medical diagnosis, and the probabilistic models we use today to forecast demand.

Your Excel says “we’ll sell 100 units.” A round, clean, deterministic number. What if you sell 120? Stockout, unhappy customer, contractual penalty. What if you sell 50? 50 units sitting in your warehouse, immobilizing capital that could be generating returns. The problem isn’t the forecast itself. It’s the arrogance of the single number. In Chapter 1 we built a “Quality Valve” that filters ERP noise. Now that we have a pure signal, we’re going to do something Excel can’t: measure uncertainty. ...