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Sales Forecasting

Sales (demand) forecasting is important for virtually any company. A good forecast is the first step in resolving many business problems: procurement optimization, allocation of resources, minimization of cash gaps, budgeting etc. The problems involved in forecasting are complicated because the demand and the sales depend on season, dynamics of business development, competitive environment, pricing policy, marketing actions, and dozens of other factors.

There is no simple one-size-fits-all way to make forecasts. In practice, users have to combine different approaches, use multiple algorithms and search for the best variant. The forecasting modules built into some data storage systems can only be used for creating elementary prediction models. Creation of a full-fledged solution requires the use of specialized systems, such as the Loginom analytical platform:

  • Data cleansing. In most cases “raw” data is unsuitable for modeling without pre-processing. Gaps, outliers, noise, and incorrect data distort the forecast. Loginom has all the necessary tools for data pre-processing and cleansing. After being treated in a special way, the data can be used for modeling.
  • Econometric models. With Loginom it is possible to use forecasting models based on formulas and classical methods such as moving average, ARIMA, additive, multiplicative and other models.
  • Adaptive models. The program contains state-of-the-art modeling mechanisms based on self-training algorithms and machine learning. These algorithms are capable of “adapting” to volatile situations, and can find both linear and complex non-linear dependencies. The use of such modeling methods allows flexible and adaptable forecasting models to be created.
  • Responsiveness to external factors. The set of methods implemented in Loginom allows the creation of forecasts that do not use only sales data. It is also possible to create systems which take into account external factors, and dependencies between merchandise groups and merchandise interchangeability. In particular, when making a forecast, it is possible to take into account whether the merchandise or its substitutes are in or out of stock.
  • Model comparison and search through. No forecasting approach is capable of covering all the needs and the taking into account of all the specifics of the sales process. To make sure the work is efficient, users have to create multiple models, search through them, select the best ones and group models. All these tasks can be performed using Loginom’s built-in tools.

Loginom contains all the tools necessary for resolving the complicated function of sales forecasting. The use of this platform ensures support throughout the work cycle, from data collection to modeling and exporting the results to external systems. Loginom contains virtually every advanced algorithm used for creating prediction models, from the simplest to the most complex.