Assessing the effect of advertising expenditures upon sales: a Bayesian structural time series model

We propose a robust implementation of the Nerlove--Arrow model using a Bayesian structural time series model to explain the relationship between advertising expenditures of a country-wide fast-food franchise network with its weekly sales. Thanks to the flexibility and modularity of the model, it is well suited to generalization to other markets or situations. Its Bayesian nature facilitates incorporating \emph{a priori} information (the manager's views), which can be updated with relevant data. This aspect of the model will be used to present a strategy of budget scheduling across time and channels.Comment: Published at Applied Stochastic Models in Business and Industry, https://onlinelibrary.wiley.com/doi/full/10.1002/asmb.246

Time Series Forecasting for Retail Sales: A Comparative Study of Traditional Econometric Models and a Machine Learning Approach

openThis thesis compares the forecasting performances of FBProphet, Holt Winters' Exponential Smoothing, and Box Jenkins ARIMA models for retail sales in the US. Mean Absolute Percentage Error (MAPE) is used as the evaluation metric for comparing the forecasts in two different scenarios. The study aims to assess if FBProphet outperforms traditional econometric models in terms of forecasting accuracy. The findings shed light on the relative strengths and weaknesses of these models and contribute to improving retail sales forecasting methodologies

Nowcasting With Google Trends in an Emerging Market

Most economic variables are released with a lag, making it difficult for policy-makers to make an accurate assessment of current conditions. This paper explores whether observing Internet browsing habits can inform practitioners about real-time aggregate consumer behavior in an emerging market. Using data on Google search queries, we introduce a simple index of interest in automobile purchases in Chile and test whether it improves the fit and efficiency of nowcasting models for automobile sales. We also examine to what extent our index helps us identify turning points in sales data. Despite relatively low rates of Internet usage among the population, we find that models incorporating our Google Trends Automotive Index outperform benchmark specifications in both in-sample and outof- sample nowcasts while providing substantial gains in information delivery times.

The impact of macroeconomic leading indicators on inventory management

Forecasting tactical sales is important for long term decisions such as procurement and informing lower level inventory management decisions. Macroeconomic indicators have been shown to improve the forecast accuracy at tactical level, as these indicators can provide early warnings of changing markets while at the same time tactical sales are sufficiently aggregated to facilitate the identification of useful leading indicators. Past research has shown that we can achieve significant gains by incorporating such information. However, at lower levels, that inventory decisions are taken, this is often not feasible due to the level of noise in the data. To take advantage of macroeconomic leading indicators at this level we need to translate the tactical forecasts into operational level ones. In this research we investigate how to best assimilate top level forecasts that incorporate such exogenous information with bottom level (at Stock Keeping Unit level) extrapolative forecasts. The aim is to demonstrate whether incorporating these variables has a positive impact on bottom level planning and eventually inventory levels. We construct appropriate hierarchies of sales and use that structure to reconcile the forecasts, and in turn the different available information, across levels. We are interested both at the point forecast and the prediction intervals, as the latter inform safety stock decisions. Therefore the contribution of this research is twofold. We investigate the usefulness of macroeconomic leading indicators for SKU level forecasts and alternative ways to estimate the variance of hierarchically reconciled forecasts. We provide evidence using a real case study

Utilizing Internet Big Data and Machine Learning for Product Demand Forecasting and Analysis of Its Economic Benefits

In the context of digitalization and big data-driven advancements, the accuracy of demand forecasting in supply chain management has become a key competitive factor for businesses. This paper introduces a hybrid model combining Graph Convolutional Networks (GCN), Long Short-Term Memory networks (LSTM), and attention mechanisms, which enhances forecasting performance by integrating internet big data. The model extracts key information from multiple data sources, uses GCN to capture complex relationships within the supply chain, and employs LSTM for processing time-series data, while the attention mechanism boosts sensitivity to critical time points and relationships, significantly improving prediction accuracy. Moreover, the model optimizes production plans and inventory management, reduces the risk of supply chain disruptions, and enhances market adaptability and competitiveness

Forecasting Methods for Marketing:* Review of Empirical Research

This paper reviews the empirical research on forecasting in marketing. In addition, it presents results from some small scale surveys. We offer a framework for discussing forecasts in the area of marketing, and then review the literature in light of that framework. Particular emphasis is given to a pragmatic interpretation of the literature and findings. Suggestions are made on what research is needed.forecasting, marketing, methods, review, research