Please use this identifier to cite or link to this item: http://repositorio.inesctec.pt/handle/123456789/6444
Title: Management of Promotional Activity Supported by Forecasts Based on Assorted Information
Authors: Ribeiro,C
José Manuel Oliveira
Patrícia Ramos
Issue Date: 2016
Abstract: Aggressive marketing causes rapid changes in consumer behavior and some significant impact in the retail business. In this context, the sales forecasting at the SKU level can help retailers to become more competitive by reducing inventory investment and distribution costs. Sales forecasts are often obtained combining basic univariate forecasting models with empirical judgment. However, more effective forecasting methods can be obtained by incorporating promotional information, including price, percentage of discount (direct discount or loyalty card discount), calendar events and weekend indicators not only from the focal product but also from its competitors. To deal with the high dimensionality of the variable space, we propose a two-stage LASSO regression to select optimal predictors and estimate the model parameters. At the first stage, only focal SKUs promotional explanatory variables are included in the Autoregressive Distributed Lag model. At the second stage, the in-sample forecast errors from the first stage are regressed on the explanatory variables from the other SKUs in the same category with the focal SKU, and to use that information more effectively three different approaches were considered: select the five top sales SKUs, include all raw promotional information, and preprocess raw information using Principal Component Analysis. The empirical results obtained using daily data from a Portuguese retailer show that the inclusion of promotional information from SKUs in the same category may improve the forecast accuracy and that better overall forecasting results may be obtained if the best model for each SKU is selected.
URI: http://repositorio.inesctec.pt/handle/123456789/6444
http://dx.doi.org/10.3233/978-1-61499-668-2-477
metadata.dc.type: conferenceObject
Publication
Appears in Collections:CESE - Articles in International Conferences
CTM - Articles in International Conferences

Files in This Item:
File Description SizeFormat 
P-00M-3MJ.pdf1.59 MBAdobe PDFThumbnail
View/Open


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.