Repository of Data Science projects done while completing a MS in Data Science from SMU
Contact information:
- Email: stacy.conant6@gmail.com
Publication:
Demand Forecasting In Wholesale Alcohol Distribution: An Ensemble Approach
Authors: Tanvi Arora, Rajat Chandna, Stacy Conant, Dr. Bivin Sadler, & Dr. Robert Slater
SMU Data Science Review, Volume 3(2020)
Publication Link
Abstract
In this paper, historical data from a wholesale alcoholic beverage distributor was used to forecast sales demand. Demand forecasting is a vital part of the sale and distribution of many goods. Accurate forecasting can be used to optimize inventory, improve cashflow, and enhance customer service. However, demand forecasting is a challenging task due to the many unknowns that can impact sales, such as the weather and the state of the economy. While many studies focus effort on modeling consumer demand and endpoint retail sales, this study focused on demand forecasting from the distributor perspective. An ensemble approach was applied using traditional statistical univariate time series models, multivariate models, and contemporary deep learning-based models. The final ensemble models for the most sold product and highest revenue grossing product were able to reduce sales forecasting error by nearly 50% and 33.5%, respectively, in comparison to a statistical naive model. Additionally, this paper determined that there is no “one size fits all” demand model for all products sold by the distributor; each product needs an individually tuned model to meaningfully reduce error.