Robust Sales forecasting Using Deep Learning with Static and Dynamic Covariates

• Type: Article in International Scientific Journal
• Date: 2023

Authors

Patrícia Ramos (Author) Other; José Manuel Oliveira (Author) FEP

Journal

Title: Applied System Innovation

Vol. 6 No. 1

Final page: 85

Publisher: MDPI

Indexing

ISI Web of Knowledge - 4 Citations

Scopus - 7 Citations

Other information

Authenticus ID: P-00Y-T84

DOI: 10.3390/asi6050085

Abstract (EN): Retailers must have accurate sales forecasts to efficiently and effectively operate their businesses and remain competitive in the marketplace. Global forecasting models like RNNs can be a powerful tool for forecasting in retail settings, where multiple time series are often interrelated and influenced by a variety of external factors. By including covariates in a forecasting model, we can often better capture the various factors that can influence sales in a retail setting. This can help improve the accuracy of our forecasts and enable better decision making for inventory management, purchasing, and other operational decisions. In this study, we investigate how the accuracy of global forecasting models is affected by the inclusion of different potential demand covariates. To ensure the significance of the study's findings, we used the M5 forecasting competition's openly accessible and well-established dataset. The results obtained from DeepAR models trained on different combinations of features indicate that the inclusion of time-, event-, and ID-related features consistently enhances the forecast accuracy. The optimal performance is attained when all these covariates are employed together, leading to a 1.8% improvement in RMSSE and a 6.5% improvement in MASE compared to the baseline model without features. It is noteworthy that all DeepAR models, both with and without covariates, exhibit a significantly superior forecasting performance in comparison to the seasonal naive benchmark.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 13