Neural Prophet-based Weekly Sales Forecasting Model

Abstract

For companies in all sorts of different sectors, sales forecasting is an essential part of long-term strategy. Optimization of inventories, effective allocation of resources, and informed decision-making are all made possible by accurate sales predictions. For a long time, this function has been filled by conventional time series forecasting techniques like ARIMA and Exponential Smoothing. The complexity of today\'s sales data, with its irregular patterns, seasonality, and non-linear trends, may be too much for conventional systems to handle. This research also presents a comparative study of sales forecasting techniques, focusing on the application of NeuralProphet, an extension of the popular Prophet forecasting library that integrates neural networks. To overcome the shortcomings of conventional approaches, NeuralProphet models complex patterns in time series data using Deep Learning (DL). The study utilizes historical sales data from a diverse set of industries, including retail, e-commerce, and manufacturing, to evaluate the performance of NeuralProphet in comparison to traditional forecasting methods. The results showed that Neural prophet showed better results compared to Facebook prophet in terms of Root Mean Square Error (RMSE).

Introduction

Overview

NeuralProphet is an advanced time series forecasting library that builds on Facebook’s Prophet by integrating neural networks. It enhances the ability to model complex patterns, seasonality, and missing or irregular data, making it highly suitable for real-world sales forecasting.

Key Features of NeuralProphet

• Handles Missing Data: Well-suited for real datasets with gaps or irregular intervals.

• Captures Seasonality: Automatically detects daily, weekly, and yearly patterns.

• Customizable: Users can fine-tune hyperparameters and include domain-specific factors like holidays and promotions.

• Built-in Visualization: Provides tools for visualizing trends, forecasts, and uncertainties.

Study Focus Areas

1. Accuracy:

   • Evaluated using metrics like MAE and MSE.

   • Compared to traditional methods (e.g., Facebook Prophet), NeuralProphet shows improved performance.

2. Robustness:

   • Effectively handles outliers, missing data, and irregular time series.

3. Customization:

   • Incorporates domain-specific knowledge and tuning options to improve accuracy.

4. Interpretability:

   • Offers insights into underlying trends, similar to traditional models, but with added complexity.

Proposed Methodology

Steps to implement sales forecasting using NeuralProphet:

1. Install the library (pip install neuralprophet)

2. Import required packages (from neuralprophet import NeuralProphet)

3. Load and prepare sales data (with ‘ds’ for date and ‘y’ for sales)

4. Train the model (m.fit(data, freq='D'))

5. Create a future data frame (m.make_future_dataframe)

6. Make predictions (m.predict(future))

7. Visualize the results (m.plot(forecast))

Results & Discussion

• Model Evaluation:
  Performance assessed using MAE, RMSE, etc. Fine-tuning improves outcomes.

• Comparative Analysis:
  NeuralProphet outperforms Facebook Prophet in detecting seasonal patterns and trends, as shown in T-shirt sales forecasting.

• Figures 3 & 4:
  Both Prophet and NeuralProphet capture annual periodicity in sales, but NeuralProphet provides more refined patterns.

• Export Capability:
  Forecasts can be exported for reporting or further analysis.

Conclusion

NeuralProphet is a powerful tool for sales forecasting, especially in dynamic business environments:

• Advantages: High accuracy, adaptability, and good interpretability.

• Limitations: May require tuning and experimentation based on the dataset’s complexity.

• Implication: Useful for businesses aiming to make informed, data-driven decisions in rapidly changing markets.

The study adds to the growing body of literature on machine learning in forecasting, emphasizing NeuralProphet’s potential in business applications.

Conclusion

In conclusion, sales forecasting using NeuralProphet offers a powerful and flexible approach to predicting future sales trends based on historical data. Here are some key takeaways and considerations. Sales projections are quite sensitive to the amount and quality of past data. Ensure that your data is clean, consistent, and representative of the underlying sales patterns. Achieving optimal forecasting performance may require tuning various hyperparameters, such as the number of layers in the neural network and learning rates. Experimentation is often necessary. While NeuralProphet can capture complex patterns, neural networks can be less interpretable than traditional statistical models like ARIMA or Exponential Smoothing. Understanding the model\'s inner workings may be challenging. Like other machine learning models, NeuralProphet can be prone to overfitting if not carefully regularized. Cross-validation and monitoring performance on validation data can help mitigate this issue. Sales patterns may change over time due to factors like market dynamics, seasonality adjustments, and external events. Continuously updating and retraining the model with new data is crucial for accurate forecasts. NeuralProphet is a valuable tool for sales forecasting, especially when dealing with complex and dynamic sales data. However, it should be used in conjunction with careful data preparation, hyperparameter tuning, and ongoing model maintenance to achieve the best results. Additionally, it\'s important to interpret the model\'s forecasts in the context of your business and industry knowledge for effective decision-making.

References

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Copyright

Copyright © 2025 V T Ram Pavan Kumar M, Nagothi Paramesh, Shaik Abdul Minaz, Sayina Prem Sainadh, N V Nagendra Babu, S M Krishnam Raju. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.