Risk Prediction Models: How They Work And Their Benefits
SearchCIO, Friday, September 8,2023
Accurate risk prediction models can aid risk management efforts in organizations. Here's a look at how risk models work and the business benefits they provide.
One of my favorite consulting clients is an outdoor clothing retailer. It's a highly seasonal business -- summer and winter gear are different, obviously. But fashions, styles and popular color combinations change every year too. The company's buyers must make decisions about the inventory well in advance to order for upcoming seasons. They obsess about ski jackets while you enjoy your summer vacation.
Success isn't just a question of getting the styles right. They must order enough products to meet customer demand, but not too much as to get stuck with expensive excess inventory. That's where a risk prediction model can help.