Practice Prize Article—CHAN4CAST: A Multichannel, Multiregion Sales Forecasting Model and Decision Support System for Consumer Packaged Goods Academic Article uri icon

abstract

  • We discuss the development and implementation of CHAN4CAST, a sales forecasting model, by pack size, category, channel, region, customer account and a Web-based decision support system (DSS) for consumer packaged goods. In addition to capturing the effects of such variables as past sales, trend, own and competitor prices and promotional variables, and seasonality, the model accounts for the effects of temperature, significant holidays, new product introductions, trading day corrections, and adjustments to the wholesale level. In general, the model forecasts sales volume satisfactorily for a leading consumer packaged goods company. The DSS enables top- and mid-level executives in sales, marketing, strategic planning, and finance to develop accurate forecasts of sales volume, plan prices, and promotional activities over a long time horizon; to track sales response to marketing actions over time; and to simulate forecast scenarios based on possible marketing decisions and other variables. CHAN4CAST is being rolled out for more users and more divisions in the company. The key take-aways are that successful development and implementation of a rigorous marketing science model require a strong internal champion, a careful balance between modeling sophistication and practical relevance, good diagnostic features, regular validations, and greater attention to the development of a fast and responsive DSS. © 2005 INFORMS.

author list (cited authors)

  • Divakar, S., Ratchford, B. T., & Shankar, V.

publication date

  • January 1, 2005 11:11 AM