Sales Forecasting by Assembly of Multiple Machine Learning Methods : A stacking approach to supervised machine learning

Abstract: Today, digitalization is a key factor for businesses to enhance growth and gain advantages and insight in their operations. Both in planning operations and understanding customers the digitalization processes today have key roles, and companies are spending more and more resources in this fields to gain critical insights and enhance growth. The fast-food industry is no exception where restaurants need to be highly flexible and agile in their work. With this, there exists an immense demand for knowledge and insights to help restaurants plan their daily operations and there is a great need for organizations to continuously adapt new technological solutions into their existing processes. Well implemented Machine Learning solutions in combination with feature engineering are likely to bring value into the existing processes. Sales forecasting, which is the main field of study in this thesis work, has a vital role in planning of fast food restaurant's operations, both for budgeting purposes, but also for staffing purposes. The word fast food describes itself. With this comes a commitment to provide high quality food and rapid service to the customers. Understaffing can risk violating either quality of the food or service while overstaffing leads to low overall productivity. Generating highly reliable sales forecasts are thus vital to maximize profits and minimize operational risk. SARIMA, XGBoost and Random Forest were evaluated on training data consisting of sales numbers, business hours and categorical variables describing date and month. These models worked as base learners where sales predictions from a specific dataset were used as training data for a Support Vector Regression model (SVR). A stacking approach to this type of project shows sufficient results with a significant gain in prediction accuracy for all investigated restaurants on a 6-week aggregated timeline compared to the existing solution.