A Comparison of Machine Learning and Classical Demand Forecasting Methods: A Case Study of Ecuadorian Textile Industry

[EN] This document presents a comparison of demand forecasting methods, with the aim of improving demand forecasting and with it, the production planning system of Ecuadorian textile industry. These industries present problems in providing a reliable estimate of future demand due to recent changes in the Ecuadorian context. The impact on demand for textile products has been observed in variables such as sales prices and manufacturing costs, manufacturing gross domestic product and the unemployment rate. Being indicators that determine to a great extent, the quality and accuracy of the forecast, generating also, uncertainty scenarios. For this reason, the aim of this work is focused on the demand forecasting for textile products by comparing a set of classic methods such as ARIMA, STL Decomposition, Holt-Winters and machine learning, Artificial Neural Networks, Bayesian Networks, Random Forest, Support Vector Machine, taking into consideration all the above mentioned, as an essential input for the production planning and sales of the textile industries. And as a support, when developing strategies for demand management and medium-term decision making of this sector under study. Finally, the effectiveness of the methods is demonstrated by comparing them with different indicators that evaluate the forecast error, with the Multi-layer Neural Networks having the best results with the least error and the best performance.The authors are greatly grateful by the support given by the SDAS Research Group (https://sdas-group.com/).Lorente-Leyva, LL.; Alemany Díaz, MDM.; Peluffo-Ordóñez, DH.; Herrera-Granda, ID. (2021). 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