Demand Forecasting Based on the Set of Short Time Series

This paper addresses the task of short historical time series and discrete descriptive parameters processing aimed at making demand forecast only on the basis of new product describing parameters. Several data mining methods are used for data processing including data extraction, pre-processing, cluster analysis and classification. Data preparation for data mining processes is made with user-defined parameters entered in the forecasting system. In the selected short historical time series the membership of an object in any class, which is a basis for creating prototypes, is determined using clustering. The k-means clustering algorithm is employed for finding the optimal number of clusters in the sample. The number of clusters is determined on the basis of the mean absolute error. As a result of classification, using inductive decision trees, a correlation between the prototype produced in the course of clustering and product describing parameters is determined. For new product demand clustering, a decision tree obtained as a result of classification is used. New product describing parameters are then projected on the tree, and a tree leave indicating the number of the prototype produced by means of clustering is found. The prototype curve structure depicts possible demand for a new product for the next period.