Sales Forecasting

Vinson Noronha – 38

Swapnil Chaware – 39

Vaibhav Shah – 40

Introduction
Sales forecasting is the process of estimating future sales. Accurate sales forecasts enable
companies to make informed business decisions and predict short-term and long-term
performance. Companies can base their forecasts on past sales data, industry-wide comparisons,
and economic trends.

It is easier for established companies to predict future sales based on years of past business data.
Newly founded companies have to base their forecasts on less-verified information, such as
market research and competitive intelligence to forecast their future business.

Sales forecasting gives insight into how a company should manage its workforce, cash flow, and
resources. In addition to helping a company allocate its internal resources effectively, predictive
sales data is important for businesses when looking to acquire investment capital.

Problem Statement
We are planning to use machine-learning models for sales predictive analytics. The main goal is
to consider main approaches of using machine learning for sales forecasting. The effect of
machine-learning generalization has been considered. This effect can be used to make sales
predictions when there is a small amount of historical data for specific sales time series in the
case when a new product or store is launched. Depending on the historical data of similar
product we can predict the sales of new product and accordingly we can increase stock of that
product in inventory systems.
Block Diagram
Dataset
 Data description
 Item_Identifier: Unique product ID
 Item_Weight: Weight of product
 Item_Fat_Content: Whether the product is low fat or not
 Item_Visibility: The % of total display area of all products in a store allocated to the
particular product
 Item_Type: The category to which the product belongs
 Item_MRP: Maximum Retail Price (list price) of the product
 Outlet_Identifier: Unique store ID
 Outlet_Establishment_Year: The year in which store was established
 Outlet_Size: The size of the store in terms of ground area covered
 Outlet_Location_Type: The type of city in which the store is located
 Outlet_Type: Whether the outlet is just a grocery store or some sort of supermarket
 Item_Outlet_Sales: Sales of the product in the particulat store. This is the outcome
variable to be predicted.

References
https://datahack.analyticsvidhya.com/contest/practice-problem-big-mart-sales-iii/