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Econometrics and Time Series Papers
Promotional Analysis and Forecasting for Demand Planning:
A Practical Time Series Approach
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Michael Leonard, SAS Institute
Abstract
Many businesses use sales promotions to increase the demand for or visibility of a product or service. These promotions often require increased expenditures (such as advertising) or loss of revenue (such as discounts), and/or additional costs (such as increased production). Business leaders need to determine the value of previous or proposed promotions. One way to evaluate promotions is to analyze the historical data using time series analysis techniques. In particular, intervention analysis can be used to model the historical data taking into account a past promotion. This type of promotional analysis may help determine how past promotions affected the historical sales and can help predict how proposed promotions may affect the future based on similar, past promotions. This paper briefly describes intervention analysis, provides practical advice for promotional analysis and forecasting using interventions, and demonstrates these practices using SAS/ETS® Software.
