Solved – How forecast weekly sales

forecastingrseasonalitytbatstime series

I'm working on a forecasting weekly sales by category. I want to make sure I'm doing it correctly. 

    date    DiningSales
3/1/2015    243334
3/8/2015    556637
3/15/2015   554315
......
10/1/2017   343660

I've read Rob Hyndman website and see he recommends TBATS for weekly data. My date range is from 3/1/2015-10/1/2017. I want to predict the next 4 weeks. Here is my code:

dining.data <- read.csv("sales_dining.csv", fileEncoding="UTF-8-BOM")
dining.df <- dining.data$DiningSales

dining.ts <- ts(dining.df, 
                 freq=365.25/7, start=2015+59/365.25)

dining.tbats <- tbats(dining.ts)
dining.fc <- forecast(dining.tbats, h=4)
plot(dining.fc, ylab="dining orders")

The code runs but my predictions for the next 4 weeks seem way off. My questions are:

  1. Did I use the correct frequency to get weekly data?
  2. Is my start date correct? I want the start date to be 3/1/2015.
  3. The next four predictions change the date to 10/7 to 2017.768. Is there a way to have the date in the results be in an actual date format?
  4. Finally it seems like there isn't a lot out there for weekly forecast, rather monthly, annual or even daily or hourly. Is weekly data harder to have a more accurate prediction?

Best Answer

freq=365.25/7 means you are assuming a year-long seasonality in your data. Since your results don't look good, try removing the seasonality by setting freq=1.

You can also try using the ets and auto.arima functions with freq=1 to see what kind of results they give. If the seasonality of your data is not strong, using a non-seasonal model will likely give better results.

You don't have a ton of data, but you could perhaps hold out a test set of 1 year to compare the tbats, ets, and auto.arima predictions.

If you have an external data that might affect sales (e.g. holidays or promotions) you can include that data in the auto.arima model, but not tbats or ets.

Also, 243334 on 3/1/2015 vs 556637 on 3/8/2015 is a pretty huge jump for 1 week: are you sure you don't have a data quality issue?

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