Sales Forecast Of An Automobile Industry printable pdf download

International Journal of Computer Applications (0975 – 8887)

Volume 53– No.12, September 2012

Sales Forecast of an Automobile Industry

Rashmi Sharma

Ashok K. Sinha

ABES Engineering College Ghaziabad

research and development; quality of service, pricing and

ABSTRACT

financing policies; and public image. Forecasters also evaluate

Sales forecast plays a prominent role in business strategy for

the quality and quantity of the customer base to determine

generating revenue. Sales forecast depends on some of the

brand loyalty, response to promotional efforts, economic

factors as the market demand, promotion strategy used, living

viability, and credit worthiness. The condition of the overall

standard of the people, inflation rate, consumables price,

economy is still a primary determinant of general sales

public image of the company, market share, quality of service

volume. If the prices for products have changed over the

and so on. In this paper sales forecast of Maruti Suzuki Ltd,

years, changes in volume of sales may not correlate well with

an automobile industry in India is considered. The inflation

volume of units. At one point in time when demand is strong,

rate, petrol price, previous month sale are found to be more

a company raises its prices. At another time, a company may

prominent parameters influencing the sales forecast of cars in

engage in discounting to draw down inventories. This process

this company. The model is trained using Fuzzy Neural Back

is similar to an inflation index, which provides constant

Propagation Algorithm. The result thus obtained is compared

prices. Forecasters study the underlying assumptions of trend

with other statistical technique like multiple regression

variations to understand the important relationships in

technique. However the result obtained by proposed algorithm

determining the volume of sales. By analyzing month-to-

is found to be superior to the result obtained by multiple linear

month trends and seasonal variations over both the long and

regression technique.

short terms, business owners and managers can adjust the

sales forecast to anticipate variations that historically repeat

General Terms

themselves during budget periods. Forecasters also trend

Neural Networks, Fuzzy System, Decision Support System,

individual products, using indexes to adjust for seasonal

Multiple Linear Regressions

fluctuations and price changes. Product trends are important

for understanding the life cycle of a product. Consumer

Keywords

attitude and lifestyles anticipate product introductions and

Sales Forecast, FBPN, Non-linear method, Automobile

technological changes. Demand based on anticipation is

Industry

becoming the dominant feature of the technological age. The

rapid pace of technological development and new product

1. INTRODUCTION

introductions have shortened product life-cycles.

The automotive sector is one of the core industries of the

The most commonly used techniques for sales forecasting

Indian economy. After allowing continuous economic

include statistically based techniques like time series,

liberalization in since 1991 the auto industry has witnessed a

regression techniques and computational intelligence method

phenomenal growth in the last two decades. India has

like fuzzy systems, artificial neural networks and neuro-fuzzy

attracted many global automotive players in recent years. The

systems [9,10,11,12]. Several forecasting techniques have

industry has greatly benefitted from increase in the paying

been developed, each one with its particular advantages and

capacity of the consumers; this has led to an increase market

disadvantages compared to other approaches.

demand.

Pei-Chann Chang, Yen-Wen Wang [1] proposed sales

For the sales forecasting to be accurate, managers need to

forecasting in PCB industry using Fuzzy Delphi and back-

consider all or some of the following factors: historical

propagation model and demonstrated effectiveness of the

perspective, business competence, market position, generic

fuzzy back propagation network (FBPN) that is superior to

economic conditions, price index, intra-company trends,

other traditional approaches. The input data is divided into

product trends, sources and magnitude of product demand.

three domains- Market demand domain, Macroeconomics

A sales forecast predicts the value of sales over a period of

domain and Industrial production domain.

time. It becomes the basis of marketing mix and sales

Mirnaser Mirbagheri [2] recognized the effective variables

planning. Sales forecasting is crucial because without a proper

which effect economic growth in Iran, and then applied

sales forecast a company cannot program to attain the desired

appropriate means for modeling and forecasting the main

sales and marketing objectives. It is based on a number of

macroeconomic variables.

assumptions regarding customer and competitor behavior as

well as the market environment, and therefore, its reliability

Stefka Stoeva, Alexander Nikov [5] presented an extension of

depends upon a number of uncertain parameters.

the standard backpropagation algorithm (SBP).In this research

SBP and FBP are compared .Fuzzy back propagation

Management analyzes previous sales experience by product

algorithm shows considerably greater convergence rate

lines, territories, classes of customers, and other relevant

compared to SBP algorithm without oscillations.

details. Management needs to consider a time line long

enough to detect trends and patterns in the growth and the

Gholamreza Jandaghi, Reza Tehrani, Davoud Hosseinpour,

decline of sales volume. The ability of a company to respond

Rahmatollah Gholipour and Seyed Amir Shahidi Shadkam

to the results of a sales forecast depends on its production

[6] proposed a model based on Fuzzy-neural networks for the

capacity, marketing methods, financing, and leadership, and

prediction of stock price. The prediction was done by the two

its ability to change each of these to maximize its profit

linear and nonlinear models for one ahead and multi ahead in

potential. Sales forecasting also considers the competitive

stock price by using exogenous variable of stock market cash

position of the company with respect to its market share;

index, and the results show the preference of nonlinear neural-

Sales Forecast Of An Automobile Industry

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