Forecasting retailer product sales in the presence of structural change

Huang, T. and Fildes, R. and Soopramanien, D. (2019) Forecasting retailer product sales in the presence of structural change. European Journal of Operational Research, 279 (2). pp. 459-470. ISSN 0377-2217

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Abstract

Grocery retailers need accurate sales forecasts at the Stock Keeping Unit (SKU) level to effectively manage their inventory. Previous studies have proposed forecasting methods which incorporate the effect of various marketing activities including prices and promotions. However, their methods have overlooked that the effects of the marketing activities on product sales may change over time. Therefore, these methods may be subject to the structural change problem and generate biased and less accurate forecasts. In this study, we propose more effective methods to forecast retailer product sales which take into account the problem of structural change. Based on data from a well-known US retailer, we show that our methods outperform conventional forecasting methods that ignore the possibility of such changes.

Item Type:
Journal Article
Journal or Publication Title:
European Journal of Operational Research
Additional Information:
This is the author’s version of a work that was acceptedfor publication in European Journal of Operational Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work 3since it was submitted for publication. A definitive version was subsequently published in European Journal of Operational Research, 279, 2, 2019 DOI: 10.1016/j.ejor.2019.06.011
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1800/1802
Subjects:
ID Code:
135419
Deposited By:
Deposited On:
06 Aug 2019 10:50
Refereed?:
Yes
Published?:
Published
Last Modified:
26 May 2020 08:04