Forecasting
Confidence Interval
A statistical range around a forecast that quantifies uncertainty. A 90% confidence interval means the actual result will fall within that range 90% of the time. Wider intervals signal higher uncertainty and should make you more cautious about committing budget. A forecast of '$500K revenue, 90% CI: $420K-$580K' is far more useful than '$500K revenue' alone because it tells you how much to trust the prediction. Narrower confidence intervals over time indicate the model is learning and improving.
Why it matters
A point forecast invites false precision. The interval is where the decision actually lives, because it tells you how wrong the number can be.
In practice
Plan against the lower bound for inventory and the upper for capacity. If the interval is too wide to decide on, you need more data, not a tighter model.
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