Fruit Sales Forecast Overview

Fruit Sales Forecast for October 2024

Using ARIMA model predictions to optimize inventory and resource allocation for fruits like Bananas, Lychees, and Oranges.

Executive Summary

This case study reviews the performance of an ARIMA model used to predict fruit sales for the first week of October 2024. The focus was on fruits like Bananas, Lychees, and Oranges, which showed reliable forecasting accuracy. The model, based on September 2024 sales data, provided key insights to help adjust inventory and allocate resources. Overall, the forecast predicts a drop in sales for all fruits, signaling the need to reduce stock to avoid overstock and spoilage.

Problem Statement

The business needs to accurately forecast fruit sales for better short-term inventory planning. Given that fruit demand can vary with the seasons, predicting sales for fruits like Bananas, Lychees, and Oranges is critical. This will help the business minimize spoilage and allocate resources more effectively.

Approach

  • Data Collection: Sales data for fruits was collected for the period from September 1–30, 2024. The selected fruits included those with reliable ARIMA model performance, such as Bananas and Lychees.
  • Modeling: An ARIMA forecasting model was used to predict sales for the first week of October. The model was assessed using metrics like AIC (Akaike Information Criterion) and variance to ensure accurate predictions for each fruit.
  • Evaluation: Fruits with clearer seasonal patterns, like Oranges and Starfruits, showed more reliable forecasts. Those with lower variance in predictions were the most accurate for short-term forecasting.

Results

Key Insights

  • Sales Decline: The forecast predicts a sales drop for all five fruits—Bananas, Lychees, Starfruits, Longans, and Oranges—in the first week of October.
  • Inventory Adjustments: Starfruits and Lychees, which had strong sales in September, show a sharp decline, signaling the need to reduce stock.
  • Stable Demand: Bananas and Oranges, while also forecasted to drop, are still in relatively higher demand compared to other fruits.

October 2024 Sales Forecast

  • Bananas: 666.80 units (compared to 4,235 units in September)
  • Oranges: 606.11 units (compared to 4,213 units in September)
Fruit Sales Forecast Results

Visualization

Take a closer look at full visualization

Strategic Recommendations

  • Inventory Reduction: Lower stock levels for all five fruits, especially for Starfruits and Lychees, to match the expected lower demand.
  • Monitor Sales Trends: Continuously track actual sales against forecasts to make necessary adjustments for the rest of October.
  • Resource Allocation: Focus on maintaining enough stock for Bananas and Oranges, as they remain in higher demand compared to other fruits. This will help better match supply with demand.

Conclusion

Using the ARIMA forecasting model, the store can better predict fruit sales and adjust inventory accordingly. With the forecast showing a general drop in sales—especially for fruits like Lychees and Starfruits—businesses can optimize inventory and resource allocation. This will help minimize spoilage and improve efficiency for Week 1 of October 2024.