Sales forecasting using combination of diffusion model and forecast market: An adaption of prediction/preference markets

S Meeran, Karima Dyussekeneva, P Goodwin

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

Forecasting sales accurately for a new product is difficult and complex due to non-availability of past data. However, such forecast information is crucial for successful introduction of new products which, in turn, determines the survival of companies, in many cases. Decisions relating to new products depend critically on reliable period-by-period sales forecasts (otherwise called forecast time series) as early as possible in the new product development cycle. This information is crucial in assessing cash flow and NPV relating to the new product. There have been many attempts to use growth curves (otherwise called diffusion models), such as the Bass model. These models made use of past data about analogous products to do this task. However, this method, although considered the best method, available, has many problems, such as identifying analogous products which can reliably mimic the new product in its sales characteristics. These difficulties explain why the accuracy of forecasts reported by such methods is, at best, 50%. Here we propose an innovative conceptual framework to obtain time series data required for forming the growth curve for the new product by bootstrapping the growth curve models with a novel 'Forecast market' mechanism. The effectiveness of the 'Forecast market' in obtaining accurate estimates of the time series data itself is likely to be enhanced by letting the 'Forecast market' participants use product information ranging from simple pictures of the product to high-end virtual reality systems which enable them to visualise and appreciate the features of the new product.
LanguageEnglish
Title of host publicationProceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013
PublisherIFAC
Pages87-92
Number of pages6
ISBN (Print)9783902823359
DOIs
StatusPublished - 2013
Event7th IFAC Conference on Manufacturing Modelling, Management, and Control, MIM 2013 - Saint Petersburg, Russian Federation
Duration: 19 Jun 201321 Dec 2017

Publication series

NameManufacturing Modelling, Management, and Control
No.1
Volume7
ISSN (Print)1474-6670

Conference

Conference7th IFAC Conference on Manufacturing Modelling, Management, and Control, MIM 2013
CountryRussian Federation
CitySaint Petersburg
Period19/06/1321/12/17

Fingerprint

Diffusion model
Sales forecasting
Prediction
New products
Growth curve
Time series data
Bootstrapping
Conceptual framework
Virtual reality
Market mechanism
Product information
Bass model
Cash flow
New product development

Cite this

Meeran, S., Dyussekeneva, K., & Goodwin, P. (2013). Sales forecasting using combination of diffusion model and forecast market: An adaption of prediction/preference markets . In Proceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013 (pp. 87-92). (Manufacturing Modelling, Management, and Control; Vol. 7, No. 1). IFAC. https://doi.org/10.3182/20130619-3-RU-3018.00619

Sales forecasting using combination of diffusion model and forecast market : An adaption of prediction/preference markets . / Meeran, S; Dyussekeneva, Karima; Goodwin, P.

Proceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013. IFAC, 2013. p. 87-92 (Manufacturing Modelling, Management, and Control; Vol. 7, No. 1).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Meeran, S, Dyussekeneva, K & Goodwin, P 2013, Sales forecasting using combination of diffusion model and forecast market: An adaption of prediction/preference markets . in Proceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013. Manufacturing Modelling, Management, and Control, no. 1, vol. 7, IFAC, pp. 87-92, 7th IFAC Conference on Manufacturing Modelling, Management, and Control, MIM 2013, Saint Petersburg, Russian Federation, 19/06/13. https://doi.org/10.3182/20130619-3-RU-3018.00619
Meeran S, Dyussekeneva K, Goodwin P. Sales forecasting using combination of diffusion model and forecast market: An adaption of prediction/preference markets . In Proceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013. IFAC. 2013. p. 87-92. (Manufacturing Modelling, Management, and Control; 1). https://doi.org/10.3182/20130619-3-RU-3018.00619
Meeran, S ; Dyussekeneva, Karima ; Goodwin, P. / Sales forecasting using combination of diffusion model and forecast market : An adaption of prediction/preference markets . Proceedings of 7th IFAC Conference on Manufacturing Modelling, Management, and Control, 2013. IFAC, 2013. pp. 87-92 (Manufacturing Modelling, Management, and Control; 1).
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