clipped from sloanreview.mit.edu

“In many situations, real-time data comes in on a continuous basis, and then you, as a decision maker, have to decide which data is information and which is pure noise,” says Jayashankar M. Swaminathan, Kay and Van Weatherspoon Distinguished Professor of Operations, Technology and Innovation Management at the University of North Carolina’s Kenan-Flagler Business School. “That’s not an easy task, which is what this study shows.”

Lurie and Swaminathan found that participants who received reports and placed orders daily had lower profits than their peers who got reports once or twice weekly. To put it another way: Even though all the participants received the same granularity of information — daily sales — those who got the information every day, as opposed to every three or six days, made worse decisions. This was particularly true when there was a high variance in actual demand.