Da Silva, Paulo Ferreira
Journal Title
Journal ISSN
Volume Title
Newspapers are considered the fastest moving consumer goods in the country, with a shelf life of only a couple of hours. Since the publishers carry the responsibility for over or under stocking newsprint products in the various retail stores, they employ a number of ‘allocation’ staff who manually modify a simplified forecasting technique to ensure that the optimal number of newspapers are delivered to each retailer in Gauteng. As it is common for the cost of newspaper production to equal or sometimes exceed the newspaper retail price, the correct allocation of newspaper copies carries a financial benefit to the publishers. To achieve a more accurate copy allocation, this research employs the Holt-Winter forecasting methodology, coupled with an adaptive closed loop algorithm. The closed loop algorithm automatically adjusts the Holt- Winter forecast to ensure that the number of copies allocated to each of the retailers is optimised. This is done to maximise the newspaper sale volume while reducing the volume produced, thus minimising the number of unsold newspaper copies and the associated financial losses attributed to overproduction. The adaptive forecasts were produced on an aggregated and disaggregated level. The aggregated method was used to forecast on a macro level, prior to the allocation of the individual copies at each retailer. Whilst this method performed well in comparison to the existing heuristic forecasting method, the forecast accuracy actually lays in the correct allocation of the aggregated forecasted result. The disaggregated method was used to forecast the number newspapers to be supplied at a retailer level. The adaptive disaggregated forecasting method not only achieved a reduction in the volume of unsold newspaper copies, but also a reduction of sales volume. Therefore, neither the adaptive aggregated or disaggregated forecast models achieved the objective of maximising newspaper sales while simultaneously reducing the volume of unsold newspapers.
Forecasting, Newspapers