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Forecasting Repeat Sales at CDNOW: A Case Study

Forecasting Repeat Sales at CDNOW: A Case Study We conducted a modeling exercise in conjunction with the online music retailer CDNOW to develop a simple stochastic model of buyer behavior capable of forecasting medium-term aggregate CD purchasing by a cohort of new customers. We modeled weekly sales using a finite mixture of beta-geometric distributions with a separate time-varying component to capture nonstationarity in repeat buying. The resulting model can easily be implemented within a standard spreadsheet environment (for example, Microsoft Excel). It does a good job of describing the underlying sales patterns and produces an excellent medium-term forecast. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Interfaces INFORMS

Forecasting Repeat Sales at CDNOW: A Case Study

Fader, Peter S.; Hardie, Bruce G. S.
Interfaces , Volume 31 (3_supplement): 14 – Jun 1, 2001
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Publisher
INFORMS
Copyright
Copyright © INFORMS
Subject
Research Article - Special Issue: Marketing Engineering
ISSN
0092-2102
eISSN
1526-551X
DOI
10.1287/inte.31.3s.94.9683
Publisher site
See Article on Publisher Site

Abstract

We conducted a modeling exercise in conjunction with the online music retailer CDNOW to develop a simple stochastic model of buyer behavior capable of forecasting medium-term aggregate CD purchasing by a cohort of new customers. We modeled weekly sales using a finite mixture of beta-geometric distributions with a separate time-varying component to capture nonstationarity in repeat buying. The resulting model can easily be implemented within a standard spreadsheet environment (for example, Microsoft Excel). It does a good job of describing the underlying sales patterns and produces an excellent medium-term forecast.

Journal

Interfaces – INFORMS

Published: Jun 1, 2001

Keywords: Keywords : MARKETING—BUYER BEHAVIOR ; FORECASTING—APPLICATIONS

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