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U2431791 DS7010 2324 T2 Introduction

This research focuses on predicting Walmart's sales using historical data from 2010 to 2013, analyzing factors such as temperature, unemployment, and fuel prices. The study aims to understand sales dynamics, particularly during holidays, to enhance promotional strategies and customer retention. By employing data mining and machine learning techniques, the research seeks to identify correlations between sales and various determinants while evaluating different predictive models.

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7 views2 pages

U2431791 DS7010 2324 T2 Introduction

This research focuses on predicting Walmart's sales using historical data from 2010 to 2013, analyzing factors such as temperature, unemployment, and fuel prices. The study aims to understand sales dynamics, particularly during holidays, to enhance promotional strategies and customer retention. By employing data mining and machine learning techniques, the research seeks to identify correlations between sales and various determinants while evaluating different predictive models.

Uploaded by

sreedevaksb
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Introduction

The constant application of ever changing technology has led to an explosion of data
generation and management in the twenty-first century. Big-box retailers like Walmart
view this data as their most valuable resource because this information can be studied
and mined using specialized tools and procedures to discover patterns and intelligence
representing how the company operates. These suggestions may then be pushed back
into the company, allowing it to improve and become more successful at meeting client
demands. The main focus of this research is to predict Walmart’s sales based on the
available historic data and identify whether factors like temperature, unemployment,
fuel prices, etc affect the weekly sales of particular stores under study. This study also
aims to understand whether sales are relatively higher during holidays like Christmas
and Thanksgiving than normal days so that stores can work on creating promotional
offers that increase sales and generate higher revenue. It is also essential for Walmart to
understand user requirements and user buying patterns to create higher customer
retention, increasing their demand adding to their profits. The findings from this study
can help the organization understand market conditions at various times of the year
and allocate resources according to regional demand and profitability. The purpose of
this study is to predict the weekly sales for Walmart based on available historical data
(collected between 2010 to 2013) from 45 stores located in different regions around the
country. Factors like Consumer Price Index (CPI), temperature, fuel price, promotional
markdowns for the week, and unemployment rate have been recorded for each week to
try and understand if there is a correlation between the sales of each week and their
determinant factors.In other words we need to be cautious when forecasting sales
incorrectly can lead to over-estimation and in turn lead to significant losses and costs of
inventory holding, in turn, under-estimation of sales in a forecast can lead to loss of
business opportunity.

So data mining and machine learning can contribute a lot to gain real insights that can
help to take informed decisions. Walmart runs several promotional markdown events
throughout the year. These markdowns precede prominent holidays, the four largest of
all, which are the Super Bowl, Labour Day, Thanksgiving, and Christmas. Will be using
different machine learning models and will find out which model is superior and why.
Analyse the sales dynamics in this stores. In this project we have to utilize Data Mining
and Machine Learning techniques and also a visual presentation to get a wholesome
picture. Data mining is the process of discovering interesting patterns from massive
amounts of data. Machine learning is a category of an algorithm that allows software
applications to become more accurate in predicting outcomes without being explicitly
programmed. The basic premise of machine learning is to build algorithms that can
receive input data and use statistical analysis to predict an output while updating
outputs as new data becomes available.

Studies have previously been performed to predict sales for retail industry corporations
based on the availability of relevant historic data. An approach by Rajat Panchotia
(Panchotia, 2020) to create a predictive model using linear regression throws light on
the various regression techniques and the metrics that need to be defined when
creating such models. He talks about the importance of defining techniques that should
be considered, like studying the number of independent variables and type of
dependent variables, determining the best fit, etc., based on the nature of data and the
most accurate regression model that should be selected based on results obtained. In
his article, he also emphasizes on the use of regression coefficients, p-values, variable
selection, and residual analysis to study the performance of regression models. While
Panchotia only focuses on studying the direct relationship between the independent
and dependent variables of the dataset, another theory by James Jaccard and Robert
Turrisi (Jaccard & Turrisi, 2018) involves observing the change in the relationship
between an independent and dependent variable as a result of the presence of a third
variable, called the moderator variable.

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