Inventory Management Through Sales Forecasting

Group A2
Anand Abhishek, Bharath Sankaran, Mayank Thapliyal, Rohan Chakraborty,
Urvashi Surana, Varun Madnani
 Data Sources
- Nestle ERP System

Pre Processing
Benchmark
- Imputed Missing Data
- Nave Model
Technical - Handled outliers
Details

Methods Used
Performance Measure Nave, MLR, Simple
Exponential, Holts, Holts
- MAPE Winter, Neural Networks
 Confidence of Validation Forecast
MONTH Actual Forecast Error LCI UCI Exponential
Feb-16 1801 3359.971 -1558.97 1477.846 5242.095 27.89%
Mar-16 4376 3359.971 1016.029 1477.845 5242.096
Apr-16 4023 3359.971 663.0294 1477.844 5242.097
May-16
Jun-16
5233
4796
3359.971
3359.971
1873.029
1436.029
1477.844
1477.843
5242.097
5242.098
BEST
Jul-16 5018 3359.971 1658.029 1477.842 5242.099
Moving Avg MLR
Aug-16
Sep-16
3699
3784
3359.971
3359.971
339.0294
424.0294
1477.842
1477.841
5242.1
5242.1 23.12% MAPE 27.96%
Oct-16 3412 3359.971 52.02941 1477.84 5242.101
Nov-16 3675 3359.971 315.0294 1477.839 5242.102
Dec-16 2918 3359.971 -441.971 1477.839 5242.102
Jan-17 3146 3359.971 -213.971 1477.838 5242.103
Nave
MONTH Forecast LCI UCI 23.78%%
1 3433.676 1509.329 5358.024
2 3433.676 1509.329 5358.024
3 3433.676 1509.328 5358.025
 Double
Exp
19.85%
BEST
Exp MLR
17.19%
MAPE 27.96%
Confidence of Forecasting
Time Forecast LCI UCI
1 10614.83 5336.514 15893.14 Nave
23.78%%
Group A2
 Confidence of Validation Forecast BEST
MONTH Actual Forecast Error LCI UCI Holts
Feb-16 162 167.9319 -5.93188 36.84671 299.0171
Mar-16 187 168.8884 18.11159 34.38071 303.3961 24.222%
Apr-16 279 169.8449 109.1551 31.08646 308.6034
May-16 315 170.8015 144.1985 26.92989 314.673
Jun-16 251 171.758 79.24201 21.89604 321.6199 Ensemble MLR
Jul-16 268 172.7145 95.28548 15.98686 329.4422
Aug-16 201 173.671 27.32895 9.217915 338.1242 24.41% 26.576%
Sep-16
Oct-16
173
226
174.6276
175.5841
-1.62757
50.4159
1.615005
-6.78925
347.6401
357.9575
MAPE
Nov-16 154 176.5406 -22.5406 -15.9583 369.0396
Dec-16 129 177.4972 -48.4972 -25.8539 380.8483
Jan-17 131 178.4537 -47.4537 -36.4381 393.3454
Neural Nave
Forecast Prediction Interval Lower Prediction Interval Higher
189.0603105 141.1370633 313.9849354 24.76% 45.35%
185.8776552 137.9544079 310.80228
182.6949999 134.7717526 307.6196247
 BEST
Exponential
18.29%

MAPE
Mvg Avg Nave
19.59% 33.59%
 Moving Avg (2)
32.41%
BEST
Double
MLR
Exponential
29.86%
30.76
MAPE

Neural Nave
30.29% 72.29%

Group A2
 Moving Avg (4) BEST
16.96%

Exponential MLR
Confidence of Forecasting 17.22 MAPE 25.70%

Time Forecast LCI UCI

1 460 244.4423 675.5577 Nave

34.23%
 Holts
10.20%
BEST

MAPE
Nave MLR
13.88% 8.87%
 MLR
7.88%

BEST MAPE
Holts
Nave
Winter
13.62%
4.78%
 MLR
BEST
38.28%

MAPE
Holts
Nave
Winter
95.60%
46.29%
Group A2
 MLR BEST
35.59%

Exponential Nave
42.12% 77.71%
MAPE

Double exp NNP

43.08% 37.74%
 MLR
17.62%

BEST MAPE
Double
Nave
exp
35.86%
17.52%
 Factors Affecting Sales Forecast

Economic Factors Industry Conditions

Quality of Data at Hand Political Conditions

New Product Launch Change in Segmentation

Price Sensitivity of Demand

 Recommendations

Opt for quarterly sales prediction

Use it as a roll forward model to best train the data set and
the model. Keep a short forecasting horizon of 1quarter.

Adjust for change in macroeconomic factors that pose the

risk of changing the entire demand pattern.