A Bayesian Combination Forecasting Model for Retail Supply Chain Coordination

Abstract

Retailing plays an important part in modern economic development, and supply chain coordination is the researchfocus in retail operations management. This paper reviews the collaborative forecasting process within the frameworkof the collaborative planning, forecasting and replenishment of retail supply chain. A Bayesian combination forecastingmodel is proposed to integrate multiple forecasting resources and coordinate forecasting processes among partners inthe retail supply chain. Based on simulation results for retail sales, the effectiveness of this combination forecastingmodel is demonstrated for coordinating the collaborative forecasting processes, resulting in an improvement ofdemand forecasting accuracy in the retail supply chain.