Forecast reconciliation is the process of aligning forecasts from different levels of a hierarchical structure to ensure that they are consistent and coherent. This approach helps in addressing discrepancies between aggregated and disaggregated forecasts, making sure that the overall forecast aligns with the individual components. Effective reconciliation is crucial for accurate decision-making and resource allocation, as it reduces errors caused by misalignment across various forecast levels.
congrats on reading the definition of forecast reconciliation. now let's actually learn it.