Leveraging Elastic Demand for Forecasting
arXiv:1809.03018v11 citations
Originality Synthesis-oriented
AI Analysis
This addresses supply chain inefficiencies for businesses, but it is incremental as it builds on existing demand shaping strategies.
The paper tackles the problem of demand variance causing supply-demand mismatches by proposing to incorporate elastic demand into forecasting, resulting in reduced variance and more effective supply planning.
Demand variance can result in a mismatch between planned supply and actual demand. Demand shaping strategies such as pricing can be used to shift elastic demand to reduce the imbalance. In this work, we propose to consider elastic demand in the forecasting phase. We present a method to reallocate the historical elastic demand to reduce variance, thus making forecasting and supply planning more effective.