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date: 19 November 2019

Abstract and Keywords

Sales forecasts are important for inventory management and for marketing. Inventories can be kept at appropriate levels, and marketing efforts can be addressed in the event that sales projections do not meet a firm's aspirations. This article discusses forecasting methods for durable products, such as high-definition television and hybrid cars, and methods for regularly purchased stock keeping unit (SKU) products like food products. Section 2 begins with durable products. The typical model used for forecasting is the Bass (1969) model, or one of its many variants, which can be extended to capture sales of sequential generations, and multilevel versions are also available. This section reviews various recent developments concerning the Bass model. Section 3 deals with forecasting SKU-level sales data. Due to the fact that such forecasts have to be made on a frequent basis, and also for many products at the same time, it is quite common to have automated programs generate forecasts and to have managers give those forecasts a final twist. Recently this practice has become the topic of much research because of the availability of detailed databases. A review of the findings in this literature is provided. The final section suggests a summary of the current state of the art and gives a few further research topics.

Keywords: sales forecasting, inventory management, durable products, Bass model, stock keeping units

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