Sales forecasting problem

1. What is the expected sales of my products across stores ?
2. What is the expected market share of my products ?
3. Do I need to increase inventory of certain products expecting a spike in sales of certain categories ?

All these are formulations of the problem related to forecasting a particular store related metric which would help store managers optimize their operations especially inventory planning and negotiating stocks with vendors.

Lets take for example forecasting sales of a certain strategic product. Sales is driven by 7 key factors

1. Consumer promotions like Gift off, Temporary price reductions, 10% extra
2. Media spend by company owning that product
3. New launch products ( which could potentially cannibalize it )
4. Seasonality of the product ( Weather could influence sales or festive seasons could influence sales )
5. Competitive media spend
6. Competitive product pricing

What are some of the forecasting techniques which could be used to predict sales ?
1. Exponential smoothing
2. ARIMA
3. Holtwinters model
4. Regression

What packages are available in the market to forecast ?
1. Dmantra from Oracle
2. Forecast server from SAS
3. APO from SAP

We can step thru some of the best practices which are used for forecasting in the next blog