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Considerations of a retail forecasting practitioner

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  • Seaman, Brian

Abstract

Forecasts can be used in an extraordinarily diverse range of ways across many domains in which forecasting practitioners work continuously towards improving their forecasts. Each of these domains may require the analysis of different kinds of inputs and special considerations. Even within a given domain, such as retail, there may be many similar use cases of the same kind of forecast, which can lead to practitioners making different decisions. This paper discusses several of the important decision points that practitioners must work through and uses item-level sales forecasting in the retail domain as leveraged by pricing and inventory management as examples of the different paths that may be taken. It considers how each use can lead to a different forecasting objective, and a corresponding focus on different error metrics. In addition, there are several tradeoffs in the forecasting methods that are used to meet each of the objectives best, including the kinds of models used, the running time speed, and forecast accuracy requirements.

Suggested Citation

  • Seaman, Brian, 2018. "Considerations of a retail forecasting practitioner," International Journal of Forecasting, Elsevier, vol. 34(4), pages 822-829.
    • Handle: RePEc:eee:intfor:v:34:y:2018:i:4:p:822-829
    DOI: 10.1016/j.ijforecast.2018.03.001
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    References listed on IDEAS

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    1. Dirk Beyer & Feng Cheng & Suresh P. Sethi & Michael Taksar, 2010. "Markovian Demand Inventory Models," International Series in Operations Research and Management Science, Springer, number 978-0-387-71604-6, December.
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    Cited by:

    1. Seaman, Brian & Bowman, John, 2022. "Applicability of the M5 to Forecasting at Walmart," International Journal of Forecasting, Elsevier, vol. 38(4), pages 1468-1472.
    2. Fotios Petropoulos & Evangelos Spiliotis, 2021. "The Wisdom of the Data: Getting the Most Out of Univariate Time Series Forecasting," Forecasting, MDPI, vol. 3(3), pages 1-20, June.
    3. Spiliotis, Evangelos & Assimakopoulos, Vassilios & Makridakis, Spyros, 2020. "Generalizing the Theta method for automatic forecasting," European Journal of Operational Research, Elsevier, vol. 284(2), pages 550-558.
    4. Petropoulos, Fotios & Apiletti, Daniele & Assimakopoulos, Vassilios & Babai, Mohamed Zied & Barrow, Devon K. & Ben Taieb, Souhaib & Bergmeir, Christoph & Bessa, Ricardo J. & Bijak, Jakub & Boylan, Joh, 2022. "Forecasting: theory and practice," International Journal of Forecasting, Elsevier, vol. 38(3), pages 705-871.
      • Fotios Petropoulos & Daniele Apiletti & Vassilios Assimakopoulos & Mohamed Zied Babai & Devon K. Barrow & Souhaib Ben Taieb & Christoph Bergmeir & Ricardo J. Bessa & Jakub Bijak & John E. Boylan & Jet, 2020. "Forecasting: theory and practice," Papers 2012.03854, arXiv.org, revised Jan 2022.
    5. Spiliotis, Evangelos & Makridakis, Spyros & Kaltsounis, Anastasios & Assimakopoulos, Vassilios, 2021. "Product sales probabilistic forecasting: An empirical evaluation using the M5 competition data," International Journal of Production Economics, Elsevier, vol. 240(C).
    6. Kang, Yanfei & Spiliotis, Evangelos & Petropoulos, Fotios & Athiniotis, Nikolaos & Li, Feng & Assimakopoulos, Vassilios, 2021. "Déjà vu: A data-centric forecasting approach through time series cross-similarity," Journal of Business Research, Elsevier, vol. 132(C), pages 719-731.
    7. Fildes, Robert & Ma, Shaohui & Kolassa, Stephan, 2022. "Retail forecasting: Research and practice," International Journal of Forecasting, Elsevier, vol. 38(4), pages 1283-1318.
    8. Sroginis, Anna & Fildes, Robert & Kourentzes, Nikolaos, 2023. "Use of contextual and model-based information in adjusting promotional forecasts," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1177-1191.
    9. Fildes, Robert & Ma, Shaohui & Kolassa, Stephan, 2019. "Retail forecasting: research and practice," MPRA Paper 89356, University Library of Munich, Germany.
    10. Spiliotis, Evangelos & Petropoulos, Fotios, 2024. "On the update frequency of univariate forecasting models," European Journal of Operational Research, Elsevier, vol. 314(1), pages 111-121.
    11. Wellens, Arnoud P. & Boute, Robert N. & Udenio, Maximiliano, 2024. "Simplifying tree-based methods for retail sales forecasting with explanatory variables," European Journal of Operational Research, Elsevier, vol. 314(2), pages 523-539.
    12. Chethana Dharmawardane & Ville Sillanpää & Jan Holmström, 2021. "High-frequency forecasting for grocery point-of-sales: intervention in practice and theoretical implications for operational design," Operations Management Research, Springer, vol. 14(1), pages 38-60, June.
    13. Wellens, Arnoud P. & Udenio, Maxi & Boute, Robert N., 2022. "Transfer learning for hierarchical forecasting: Reducing computational efforts of M5 winning methods," International Journal of Forecasting, Elsevier, vol. 38(4), pages 1482-1491.
    14. Evangelos Spiliotis & Spyros Makridakis & Artemios-Anargyros Semenoglou & Vassilios Assimakopoulos, 2022. "Comparison of statistical and machine learning methods for daily SKU demand forecasting," Operational Research, Springer, vol. 22(3), pages 3037-3061, July.
    15. Makridakis, Spyros & Spiliotis, Evangelos & Assimakopoulos, Vassilios, 2022. "M5 accuracy competition: Results, findings, and conclusions," International Journal of Forecasting, Elsevier, vol. 38(4), pages 1346-1364.
    16. Qi, Lingzhi & Li, Xixi & Wang, Qiang & Jia, Suling, 2023. "fETSmcs: Feature-based ETS model component selection," International Journal of Forecasting, Elsevier, vol. 39(3), pages 1303-1317.

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