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Detailed Sales Forecasting Presentation

The presentation covers sales forecasting using machine learning, emphasizing the importance of accurate predictions for inventory planning and financial decision-making. It details the process from data collection and preprocessing to model selection, specifically highlighting the effectiveness of the XGBoost model. Key takeaways include the significance of data preprocessing and feature engineering in achieving successful forecasting outcomes.

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Apoorva Singh
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16 views10 pages

Detailed Sales Forecasting Presentation

The presentation covers sales forecasting using machine learning, emphasizing the importance of accurate predictions for inventory planning and financial decision-making. It details the process from data collection and preprocessing to model selection, specifically highlighting the effectiveness of the XGBoost model. Key takeaways include the significance of data preprocessing and feature engineering in achieving successful forecasting outcomes.

Uploaded by

Apoorva Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Sales Forecasting Using Machine

Learning
Class Presentation by [Your Name]
1. Problem Understanding
• Sales forecasting is the process of estimating
future sales based on historical data.

• Why is it important?
• - Helps businesses plan inventory
• - Optimizes resources and logistics
• - Improves financial planning and decision
making
2. Data Collection
• The data used in sales forecasting typically
includes:
• - **Date**: Sales at a daily, weekly, or
monthly level
• - **Sales numbers**: Historical sales revenue
or units sold
• - **Features**: Promotions, holidays,
competitor prices, weather, etc.

• Example datasets available on Kaggle:


3. Data Preprocessing
• Data preprocessing is crucial before feeding
the data into machine learning models.

• Key steps include:


• - **Handling missing values**: Remove or fill
missing data
• - **Feature engineering**: Extract features
like 'Month', 'Day of the Week' from the 'Date'
• - **Handling outliers**: Correct or remove
extreme data points that may skew results
4. Feature Engineering
• Feature engineering helps create meaningful
features from raw data to improve model
performance.

• Example Features:
• - **Date-based features**: Extract month,
week, day, and seasonality from the 'Date'
column
• - **Lag features**: Create previous day, week,
or month sales as input features
5. Model Selection
• Various machine learning models can be used
for sales forecasting:

• - **Linear Regression**: Suitable for simple,


linear relationships
• - **Decision Trees & Random Forest**:
Capable of capturing non-linear relationships
• - **XGBoost**: An advanced gradient
boosting algorithm, highly effective for
structured data
6. Example: XGBoost Model
• Why XGBoost?
• - It handles missing data and works well with
large datasets.
• - It captures complex non-linear patterns and
interactions between features.

• Steps for training the model:


• 1. Initialize the XGBoost model
• `model = XGBRegressor()`
7. Model Evaluation
• To assess the performance of the model, we
use the following metrics:

• - **Root Mean Squared Error (RMSE)**:


Measures the square root of the average
squared differences between predicted and
actual values
• - **Mean Absolute Error (MAE)**: Measures
the average magnitude of the errors without
considering their direction
8. Hyperparameter Tuning
• Hyperparameter tuning optimizes the model’s
performance by finding the best combination
of parameters.

• Common hyperparameters in XGBoost:


• - **n_estimators**: The number of trees to
build
• - **learning_rate**: Step size for updating
model weights
• - **max_depth**: Maximum depth of each
9. Conclusion and Future Work
• In this project, we successfully built a machine
learning model to forecast sales using
historical data.

• Key Takeaways:
• - Data preprocessing and feature engineering
are critical to model success.
• - XGBoost is a powerful tool for handling
tabular data and providing accurate
predictions.

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