Hybrid convolutional long short‐term memory models for sales forecasting in retail

Thais de Castro Moraes, Xue‐Ming Yuan and Ek Peng Chew

Journal of Forecasting, 2024, vol. 43, issue 5, 1278-1293

Abstract: This study proposes novel sales forecasting approaches that merge deep learning methods in a hybrid model. Long short‐term memory (LSTM) is adopted for modeling the temporal characteristics of the data, whereas the convolutional neural network (CNN) focuses on identifying and extracting relevant exogenous information. We propose stacked (S‐CNN‐LSTM) and parallel (P‐CNN‐LSTM) hybrid architectures to understand complex time series data with varying seasonal patterns and multiple products correlations. The performance drivers of both architectures were empirically tested with a real‐world multivariate retail dataset and outperformed when compared with simple neural network architectures and standard autoregressive methods for short and long‐term forecasting horizons. When compared with traditional predictive approaches, the proposed hybrid models reduce the computational complexity while providing flexibility and robustness.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jforec:v:43:y:2024:i:5:p:1278-1293

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