Abstract for: Po with the flow: Modeling intangibles in business forecasting with StochSD

The problem with typical business forecasts is that they either ignore intangible factors or use averages or other single data points in their models.System Dynamics (SD) acknowledges intangibles but often uses single data points. Applied Information Economics (AIE) provides a structured approach to decision-making under uncertainty but, unlike SD ignores feedback. StochSD is presented as a tool that integrates the key features of both approaches Point based forecasts, AIE, and SD are briefly described with respect to their limitations for forecasting in the business context. StochSD is proposed as a solution for these limitations. A small model is demonstrated, pitting a deterministic version against a stochastic version and the results compared The stochastic version provided significantly greater information for decision makers to consider, providing a clear probabilistic account of the risks inherent in the project given the current state of information about key variables Distributions of outcomes are key to decision makers being able to identify variables where more information would reduce uncertainty, clarify decisions, and so facilitates both more objective decision making and organisational learning Used for search within texts and help with issues of model error, occasionally for rephrasing