Forecasting Using Interval Neural Networks: Application to Demand Forecasting

Demand forecasting is to estimate the demand of customers for products and services. Since the future is uncertain in nature, it is too difficult for us to predict exactly what will happen. Therefore, when the forecasting is performed upon the uncertain future, it is realistic to estimate the value of demand as an interval or a fuzzy number instead of a crisp number. In this paper, we propose a demand forecasting method using the standard back-propagation algorithm and then we extend the method to the case of interval inputs. Next, we demonstrate that the proposed method using the interval neural networks can represent the fuzziness of forecasting values as intervals. Last, we propose a demand forecasting method using the transformed input variables that can be obtained by taking account of the degree of influence between an input and an output.