Forecast adjustments during post-promotional periods

Harsha Chamara Hewage, H. Niles Perera and Shari De Baets

European Journal of Operational Research, 2022, vol. 300, issue 2, 461-472

Abstract: Sales promotions are a key cause for judgmental adjustments to forecasts, especially in the world of Fast-Moving Consumer Goods (FMCG). Typically, three types of periods are relevant for sales promotions: a normal period as a comparison point, a promotional period, and a post-promotional period. Yet, research on forecasting with sales promotions has focussed specifically on promotional effects and their elevation versus a normal sales period, while generally disregarding adjustments for post-promotional periods. To investigate further into the effects of promotions after their occurrence, we employed an incentivized laboratory experiment focussing specifically on the role of human judgment in sales forecasting after a promotion has occurred. Our study shows that, without guidance, the post-promotional period is considered equal to a normal period in sales numbers. However, a post-promotion dip is commonly observed in reality. We therefore introduced information on the existence of post-promotional dips, in itself (treatment one) or with added average magnitude of such a dip (treatment two). Information provision resulted in increased forecasting accuracy in both treatments, but more so in treatment two. Thus, this study promotes the provision of guiding information. We find that structured support, allows an improvement in judgmental forecasting accuracy after a sales promotion.

Keywords: Forecasting; Judgmental adjustments; Sales promotions; Post-promotional effect; Behavioral supply chain management (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221721006676
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:300:y:2022:i:2:p:461-472

DOI: 10.1016/j.ejor.2021.07.057

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().