Industrial Engineering and Management Systems

Korean Institute of Industrial Engineers (대한산업공학회)
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Lessons Learned and Challenges Encountered in Retail Sales Forecast

  • Received : 2014.12.17
  • Accepted : 2015.05.26
  • Published : 2015.06.30
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Abstract

Retail sales forecast is a special area of forecasting. Its unique characteristics call for unique data models and treatment, and unique forecasting processes. In this paper, we will address lessons learned and challenges encountered in retail sales forecast from a practical and technical perspective. In particular, starting with the data models of retail sales data, we proceed to address issues existing in estimating and processing each component in the data model. We will discuss how to estimate the multi-seasonal cycles in retail sales data, and the limitations of the existing methodologies. In addition, we will talk about the distinction between business events and forecast events, the methodologies used in event detection and event effect estimation, and the difficulties in compound event detection and effect estimation. For each of the issues and challenges, we will present our solution strategy. Some of the solution strategies can be generalized and could be helpful in solving similar forecast problems in different areas.

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