Big Data Management Project

On
Car Sales Analysis Based on the Application of Big Data

SUBMITTED TO-
Dr. Amit Kumar Bhardwaj

Submitted by-
Abhay Thakur(401508004)
Akshay Kushwaha(401508007)
Ankit Sharma(401508008)
 ABSTRACT

The field of Big Data plays a vital role in various fields. Big data is a term for massive
data sets having large amounts of data, more varied and complex structure with the
difficulties of analyzing, storing and visualizing for further processes or results. The data
about car sales are derived from various sources .Sales of cars does not contain any
independent variable since various factors such as horse power; model, width, fuel type,
height, price, city-mileage, highway-mileage and manufacturer are the various features
that influence the sales.
In car sales prediction we first implement the methodology of analytic hierarchy process
in order to get varied idea about how well the various criteria’s in our dataset works and
after this we apply the machine learning algorithms such as Linear regression, Random
tree to get the best clusters and we process them in to random forest to get best accurate
feature out of it. This project takes the automobile manufacturing industry as an example,
based on sale car large data analysis, using data mining technology, through the program
to prepare web crawler program for data collection.
To give some suggestions for the automobile manufacturing industry in the production of
automobile, it reduces the inventory of automobile enterprises and the waste of resources.
In this paper Vehicle sales forecasts are used to plan production of various models in
Ford's product portfolio.
The results in this study could help the automobile companies better understand their
business, and the auto companies could use the results for possible strategic decisions. In
addition, legislatures in the impacted states could use the results to prepare for
fluctuations in the industry that would result in profound effects on the states in question.
 INTRODUCTION
Big Data refers to enormous amount of structured or unstructured data related to latest
trends, patterns and association which can be analyzed by companies for business gains.
Big Data has the potential for companies to improve their operations for faster, increasing
decisions.

The reasons for companies to incline towards adopting big data are Time, Better
Analytics, Vast amount of data, Insights, Decision-making. There are several benefits of
Big Data like Gain instant appreciation from different data sources, Upgrade business
performance through real-time analytics, big data technologies manage huge amounts of
data, Can provide better appreciation with the help of useful and partially useful data and
minimize the chances of risk level and make right decision by proper risk analysis. Due
to the various benefits of big data, the big data applications have emerged and they help
to play important roles in different fields

Big Data Application in Media and Entertainment

New business models are launched for different companies in the media and
entertainment industry. The business model runs on collecting or creating the content,
further to analyze it, then marketing and distribution of the content. As the rate of
consumer’s search increases, there is a need for obtaining content at any moment, in
whatever place in all formats on a variety of devices. Big data runs through customer’s
data along with observable data and gather even minute information to create a
customer’s detailed profile. The benefits of big data in media and entertainment industry
include forecasting what the target audience wants, planning optimization, expanding
acquisition and retention; suggest content on demand and new product development.
Big Data in Manufacturing

The demand of natural resources like oil, minerals, petroleum, metal ores and agricultural
products has increased, which has led to an increase in the mass, proportion, velocity and
complexity that is an issue to handle. In the natural resources industry, big data helps
predictive modeling to sustain decision making and has been employed to consume and
combine graphical, text and temporal data. The benefits of Big Data applications in
manufacturing are Quality of the product, Supply scheduling, Tracking defect in
Manufacturing process, Predicting output, Expanding Energy Efficiency, Testing of new
manufacturing processes, developing new manufacturing process. Big Data has
successfully solved today’s manufacturing issues and hopefully in the future as well.

Big Data in Education

The impact of Big Data in the education world is immense. Today, internet makes it
easier and efficient and can be available almost anywhere, anytime all around the world.
Hence, online learning is available for every possible course. There are many examples
of the Big Data Usage in the education industry. Various Applications are built to help
teachers and students in almost all formats through mobile devices. Practically staff and
institutions have to adapt to the new data management and analysis tools. Adaptive
learning produces big-data-fuelled projection analysis to discover what a student is
learning. Some problems may occur in the digital system of learning like duplicity and so
on, which Big Data controls it and provides significant changes. Privacy and Personal
data protection related to big data needs some attention.

Big Data in Transportation

In latest times, enormous amounts of data from location-oriented social networks and
high speed data from telecoms have influenced travel journeys. The big data applications
in transportation industry are included by governments, private and personal sector.
Government use big data in traffic handling, direction planning, well organized
transportation systems and forecasting traffic conditions. Private sector use big data in
income management, industrial enhancements, logistics and affordable benefits. Personal
use of big data includes planning directions to retain fuel and time while travelling.

Big Data in Banking

Banking is a very crucial sector. The security, privacy, management and maintenance of
any banking system is a challenge. Big Data is very beneficial and helps in the fraud
detection in banking system. As Big Data is implemented, it searches all the illegal
activities that has taken place. It identifies the misuse of credit and debit cards, business
precision, customer statistics modification, public analytics for business.

Big Data Applications are helpful and handy in almost every field. It provides
detailed information about the respective field. It helps the industries to create new
growth opportunities. It also understands and optimizes business procedures. Big Data
Applications are have been very useful in recent times and optimistically in future as
well.

Autos Sales is one of the major producers of domestic automobiles report sales monthly.
This is an important element to the financial markets since it is highly correlated with
consumer demands for the market and car sales can express the changes in the economy
precisely. There is an old warning story named “boiled frog.” The frog’s body
temperature follows its surroundings. If you put the frog directly in boiling water, it will
sense the heat immediately and jump out. However, when you heat the water slowly, the
frog keeps adjusting to the rising temperature. When the heat is too much for the frog to
take, it is too late. The frog collapses and dies. This theory can apply into economic as
well. For example, in a hamburger restaurant, if the price for one hamburger change from
$5.49 to $5.99, it would not have many people noticed this change. Therefore, it would
not affect their sales a lot based on common sense. Nevertheless, if the price for one
hamburger changes from $5.99 to $6.99, people will catch this change easily and the
sales for the hamburger may decrease due to the change in price. Various differences in
auto sales share the same situation here. For predictors which can use for estimating the
change in auto sales, when the predictors change a little bit, auto sales may not shift
according to this adjustment and it will not be influenced by this. However, if there is a
big change in one predictor, then it will lead a change in auto sales just as the “boiled
frog” theory. Having a small change in predictors seems like that putting a frog in and
heating the water slowly, auto sales will adjust itself and change a little bit to follow the
changing trends in predictors.
LITERATURE REVIEW
Automobile industry is defined as the business of producing and selling vehicles (Kung
and Chang, 2004). It consists largely of a wide range of companies and organizations
involved in the process of design, developement, manufacturing, marketing and so on.
Moreover, the automobile industry is also evaluated as one of the key driver of economic
sectors by revenue because it has positively encouraged the development of an extensive
road system, supported the growth of suburbs and shopping centers around major cities,
and played a key role in the growth of ancillary industries (Kulkarni and Rao, 2014) in
addition, the large number of people currently employed the industry has made it a key
determinant of economic growth as well.

Automotive also contributes significantly to several important dimensions of nation

building, such as generating government revenue, creating economic development,
encouraging people development, and innovation. Consequently, the automotive sector
impacts global economic activity in a variety of ways and also affected by the global
economic situation (NAR, 2013).

Sales forecasting is also an important part of starting a new business (Previts et al., 1994).
Almost all new businesses need loans or start-up capital to purchase what are necessary
to get off the ground such as office rental, equipment, inventory, etc. Particularly in
getting the loan, an entrepreneur must demonstrate his business plan or the valuable
guaranty or mortgage. As business grows, sales forecasts continue to be an important
measurement of company's ability (Doyle, 2000). Wall Street measures the success of a
company by how well it meets its quarterly sales forecasts (Jensen, 2001).

Sales forecasts are the foundation of planning. The forecasts enable an organization to
have an optimum inventory level, to make appropriate purchasing decisions and to
maintain efficient daily operations. All these affect the profits of the organization.
Therefore, forecasting is critical to profitability.
Strategic planning based on reliable forecasts is an essential key ingredient for a
successful business management within a market-oriented company. This is especially
true for the automobile industry, as it is one of the most important sectors in many
countries. Reliable forecasts cannot only be based on intuitive economic guesses of the
market development. Mathematical models are indispensable for the accuracy of the
predictions as well as for the efficiency of their calculations, which is also supported by
the increase of powerful computer resources. The application of time series models to
forecasts of the registrations of new vehicles was originally established by Lewandowski
[1, 2] in the 1970s. Afterwards, a general equilibrium model for the automobile market
concerning both new car sales and used car stocks was presented by Berkovec [3].
Thereby, equilibrium means that the demand equals the supply for every vehicle type.
Later on, Dudenh¨offer and Borscheid [4] published a very important application of time
series methods to the German automobile market. However, the number of efforts
undertaken in this field of research is quite small to date.

Demand planning involves the process of creating and affecting demand in the future.
Regardless of method chosen (promotion, etc.), forecasting helps assess the impact of
each possible decision upon demand. Demand management integrates all aspect of an
organization’s strengths and weaknesses. It includes not only planning and forecasting
but also coordinating all activities that affect customer demand, e.g. creating, shaping and
fulfilling demand.

Demand forecasting requires projecting what will happen to demand in the future.
Obviously, this requires statistical forecasting methods. Unfortunately, there is still a gap
between the statistical and economic techniques offered by forecasting and the
judgmental technique most executives use to forecast demand (Shahabuddin, 1987;
Sanders, 1997).

There are many techniques of forecasting, and they vary in complexity, ease of use, and
the amount of data needed. Among the many forecasting techniques, many surveys
(Sanders, 1997; Mahmoud, 1984) have found the judgmental technique to be dominant.
However, many studies (Armstrong, 1986; Dunn and Wright, 1991) have found that the
judgmental technique is less accurate, more biased, and more likely to lead to poor
forecasts than other techniques.

Methods based on statistical learning theory [5] are powerful instruments to get insight
into internal relationships within huge empirical datasets. Therefore, they are able to
produce reliable and even highly accurate forecasts. However, Data Mining algorithms
have become more and more complex over the last decades. In this work, the accuracy of
the prediction has the same importance as the explicability of the model. Hence, only
classical Data Mining methods [6] are applied here.

Instead of using a statistical forecasting technique, some companies use intention to-buy
survey data to forecast sales. Consumer durable product manufacturers often use
purchase intention to forecast. The US government conducts surveys to forecast spending
on durable goods. The survey results are presumed to help predict future sales. A study
(Morwitz and Schmittlein, 1992; Morrison, 1979; Armstrong et al., 2002) found a
positive correlation between purchase intention and purchase behavior. Theory suggests
that the best predictor of future behavior is past behavior. However, some social
psychologists believe that a good predictor of what individuals will do is their intention-
to-perform the behavior (Fitzsimmon and Ajzen, 1975). Others suggest that the intentions
as predictors can work only under certain conditions (Armstrong, 1985). The conditions
are .

 That the event is critical in the life of the intender.

 that the intender has the ability to fulfill the plan. .
 that conditions which affect the intention do not change.
 that the intender reveals accurate intention.

Despite the lack of reliable data, researchers do try to relate purchase intention to
purchase behavior. Even though these attempts suggest that this relationship is useful,
there has been no research testing the predictive accuracy of intentions and past sales. Lee
et al. (1997) found very little relationship between buying intention and sales.

 Due to the use of improper forecasting techniques, most forecasts give inaccurate
results. In addition to the use of inappropriate methods of forecasting, there are
other reasons for forecasting errors:
 Many forecasts rely on historical data without understanding the underlying basis
of the data. For example, an unexpected jump in sales becomes part of the
historical data instead of being considered as an outlier that may not happen again.
.
 Forecasters tend to ignore likely changes that may influence the forecast, e.g.
increases in population, increases in competition, technological changes, etc. Any
or all of these factors may affect the organization’s sales and can easily be
included.
 Using inappropriate computational methods for the data. Each type of data (e.g.
time series, cross-sectional data) requires different forecasting techniques.
Incorrect computational techniques cause errors in forecasts. .
 Forecaster bias affects results and should be kept to a minimum. Individual biases
as a result of personal optimism or pessimism have no place in forecasting. Bias
increases error in forecasts.

Forecasting is especially complicated due to the changing economic factors among which
any business operates. The economic factors include the Gross National Product (GNP),
the employment rate, the discount rate, the population growth rate, and others. These
economic factors have major effects on the manufacturers of durable goods. Their
relationships are complicated by the possibility that some of these factors have lagged
effects on the sales of durable products. In addition, sales of many products are affected
by seasonal fluctuation. All these economic factors are relevant when forecasting durable
goods, e.g. automobile, sales. Forecasts can be further complicated by sales promotions
and advertising activities. Therefore, forecasters must be aware of these activities,
although it is difficult to time their occurrences and to track the numbers of these
activities. In addition, forecasters must consider activities that may cause problems in
forecasting, and, if data are not available on these activities, forecasters should at least be
cognizant of the problems and take the possibility of inaccurate results into consideration.
Regardless of the difficulties, appropriate statistical models with relevant variables make
for the best results.

An analysis of the sales of consumer durable goods in Britain found that the demand for
cars increased by 90 percent from 1970 to 1978 while the disposable income rose by 21
percent in the same period (Pickering, 1978). Obviously, this analysis indicates that
income alone does not determine automobile demand. One possible explanation could be
that consumers’ durables are purchased not with current income but are bought with
savings or are financed. Further, consumer spending on durable goods, especially
automobiles, can be postponed to accommodate multiple factors as the useful life of the
goods can be extended through repair and maintenance. In addition, ownership of more
than one car is also likely.

These uncertainties make demand for durable consumer goods difficult and challenging
to forecast. Fauvel and Samson (1991) state that spending on durable goods in indeed the
most volatile component of total consumer expenditures. In the USA, consumer durable
goods purchases represent a huge market (e.g. $3,769,235 million in 2003), but not much
research has been done to accurately forecast the sales of these products (Fauvel and
Samson, 1991). The forecast work that has been done relates to new products or
intention-to-buy methods. A library and Google’s Scholar search on ‘‘forecasting
demand for durable goods’’ generated 45 items that mostly dealt with new products. Data
for durable goods are hard to find and may be unreliable. However, due to its importance
to consumption and the economy, forecasts of sales of durable goods such as automobiles
are critical.

The automobile industry plays a critical role in many economies. Demand for
automobiles also determines trend for travel and tourism, roads, and patterns of housing
(Abu-Eisheh and Mannering, 2002). That is, the more people own cars, the more they
have the ability to travel and, thus, the higher the demand for more and better roads. The
mobility of people also determines where and when they can locate their houses beyond
congested cities, resulting in the expansion of communities. All of these activities expand
economies and create jobs. In turn, the expansion puts pressure on politicians, urban
planners and traffic engineers to be cognizant of trends in automobile ownership. The
demand for automobiles is a critical consumer decision and is influenced by sociological
and economic factors, and automobile ownership affects both developing and developed
countries (Wu, 1965; Abu-Eisheh and Mannering, 2002)

Not much analytical work has been done relating to automobile sales, which account for
a large share of the durable goods market. Studies by Carlson and Umble (1980) and
Harris (1986) tried to forecast demand for automobiles. Carlson and Umble (1980)
predicted demand of automobile from 1979 to 1983 by segmenting automobile into five
classifications: sub-compact, compact, intermediate, standard and luxury. The authors
were trying to determine the relationship between the price of gasoline and other major
factors and the sale of cars. They found that the sales of compact cars grew faster (from
35 to 45 percent) than the sales of other type of cars. They also established that economic
conditions were the major determinant of future automobile sales. The study also found a
relationship between the price of gasoline and the sales of cars. However, the study was
limited to two independent variables trying to forecast sales during a difficult political
period (the oil embargo). Harris (1986) also studied the relationship of some economic
variables to sales of automobiles and found a significant relationship between demand
and some economic variables.

However, forecasting the overall market for automobiles – in units as well as in dollars –
is important to policy makers. Therefore, a comprehensive model relating automobile
sales to as many relevant economic variables as possible is likely to be the most
appropriate model (Carlson and Umble, 1980). Forecasting automobile sales requires
inclusive analysis that must consider personal and relevant national economic factors to
achieve good results. This study uses regression analysis to forecast automobile sales in
the US del (Carlson and Umble, 1980; Suits, 1958; Thompson and Noordewier, 1992).

Sales forecasting is particularly important because its outcome affects many functions in
the organization (Armstrong et al., 2000). Based on the forecasting results, business
operations may respond lost orders, inadequate service and poorly utilized production
resources in the short term; or managers may easily adapt with financial issue and make
right market decisions so that the organization may be brought into question in the long-
run (Kotsialos et al., 2005). In fact, most conventional sales forecasting methods used
either factors or time series data to determine the sales prediction (Nguyen and Tran,
2017a; Nguyen et al., 2015; Wang et al., 2015). Grey system theory, a new research
method which was formulated by Deng (1982) to study the problems of less data, poor
information and uncertainty (Liu et al., 2004) is used forecast sales in this study. It is to
make positive analysis about the increasing of the net sales of Nissan Motor Company
from 2008 to 2013, which are used for the prediction of the 4 coming years, 2014 to
2017.

The purpose of this research is to build a Grey model which fits into net sales and to see
its feasibility and how it works in forecasting net sales. Collectively, there is some
empirical evidence indicating that the subjective techniques popular for all types of
forecasting situations are effective. Among the statistical forecasting approaches,
exponential smoothing has recently been gaining in popularity (Nguyen and Tran, 2017b;
Tran, 2016; Tran, 2017; Trinh and Tran, 2017). In particular, in recent years, Grey system
theory have been applied to many other areas like during the past several years, the grey
system theory has been widely used to explore in various fields and demonstrated
satisfactory results (Kayacan et al., 2010).

Escalation in fuel prices affect on car demand in sales unit Cheng and Tan (2002)
mentioned the sharp oil price is one of the external factors which have a significant
influence on Malaysian inflation in 1973 and 1974; the substantial price increases in 1973
were brought about mainly by the shortages of food and raw materials arising from bad
weather and increased aggregate demand.

Besides, upon studying on “Why do car prices differ across European countries?”, it
points out that in the situation of cars market in the European, the income tax, oil price,
wage and the standard of livings will affect the willingness of people buying a cars and
the ability to buy a car. For instance, the fuel price will affect the demand of cars in the
car markets in countries. Higher price of fuel, lower the demand of cars in the market.
People will prefer using public transportation rather than using their own cars. And new
car buyers will need to think more to decide buying cars, because high fuel price
increases the cost of driving cars on their own. So price of fuel can affect the demand of
car in market directly. On the other way, countries with high fuel price will lower the
people wants to buy a car.

Increase in the income has influence on car demand and car consumption J. M.
Dargay (2001) studies the effect of income on car ownership, and the results indicate that
rising income leads to higher car ownership. Rising income makes it easier for
households to own cars. Again J. Dargay (2007) continues to examine the effect of prices
and income on car travel in the UK. It analyses the factors determining household car
travel, and specifically the effects of household income and the prices of cars and motor
fuels. The data shows the diffusion process: motoring has become more prevalent in
successive generations. Car travel is more affected by car purchase costs than by fuel
prices, implying that once obtained, cars are used despite rising variable costs for their
use. On the other hand, car ownership is more sensitive to car purchase costs than to fuel
prices as expected. Thus, car use responds more rapidly to changes in income and prices
than car ownership.

In a study on car demand in European countries also shows that the incomes of people
will the main factor that affects the demand of cars in the market. The main income of
people is wages, so high wages people with higher purchasing powers; they have higher
demand for luxury goods, like cars, sport cars and houses. Graham and Glaister (2002) in
survey about the response of motorists to fuel price changes and an assessment of the
orders of magnitude of the relevant income and price effects. It means that the effect of
price on fuel consumption and on motorists’ demand for road travel, and the demand for
owning cars in heavily dependent on income. Also Eltony (1993) uses household data to
quantify the behavioral responses that give rise to negative price elasticities of demand
for gasoline. The result recognizes three main behavioral responses of households in
Canada to changes in gasoline prices: drive fewer miles, purchase fewer cars and buy
more efficient vehicles. Wetzel and Hoffer (1982) mentioned factors such as gasoline
prices, styling changes, and demographic changes influenced the price elasticity of
demand in each submarket differently using the disaggregated model. The models
suggest that motor fuel price increases have a significant but temporary impact on
consumer demand for the largest American car. Furthermore, as higher income
individuals took delivery of previously ordered cars early in the model year.

Car Sales Prediction Using Machine Learning Algorithms Machine learning models
and bankruptcy prediction is a paper work which talks about the improvement that takes
place in academics industry with the aid of machine learning algorithms in predicting
bankruptcy. This paper implements the usage of algorithms such as bagging, boosting,
random forest and support vector machine for predicting bankruptcy even before the
event occurs and a greater span of comparative study takes place with the performance of
these results with the results of logistic regression and neural networks [9]. Original
Altman’s Z-score variables are used as predictive variables with addition of extra
variables such as the operating margin, sales, growth measures related to assets, change
in return-on-equity, change in price-to-book, and number of employees based on carton
and Hofer(2006).

Explaining machine learning models in sales prediction is a generic

manuscript that discusses about the recent trends of predictive models, real time scenarios
in order to gain a deep insight about buyers and seller’s interaction and the forecasting of
sales [5]. Early churn prediction with personalized targeting in mobile social games is a
manuscript that explains Customer churn .churn is defined by the act of a customer
leaving a product for good. This churn are reduced to a greater extent by following the
procedure of mapping the feature with the interest of the customer and pushing the
notifications in order to drag back the customer in to the game .this manuscript
implements the methodologies such as logistic regression for the simple object linear
model ,decision trees for extracting redundancy from features random forest to be used in
various situations .Naive Bayes for generating the models and gradient boosting for its
popularity [4].

Industry big data present situation Physical information system and intelligent analysis
will come, for us to achieve production management and industry transformation and
upgrade provides a new train of thought, today measure of the manufacturing industry
level has not only concerned about the product manufacturing capacity, but for the
customer more innovative value. Professor Lu Wei believes that the nature of the
industry's big data is data driven industrial upgrading, that is, through the big data
analysis to stimulate research and development, service and manufacturing innovation,
promote industrial upgrading. Professor Li jie thinks that enterprises must to know the
client also does not speak out, customers speak out that it are not called problem[4],
industrial data analysis is the competitive advantage of industrial development, industrial
data analysis can help Chinese enterprises to reduce manufacturing cost, improve product
quality, mining is not visible to the needs of users. He talked about the Trinity. With the
achievements in the world for the good interpretation of the industrial data analysis, it
will achieve and enhance the competitiveness of the point of view to product value which
made in China [5]. November 2015, the Fifth Plenary Session of the party's eighth
plenum proposed to implement a national data strategy, which is the data for the first time
to write to join the party plenum resolution, marking the data strategy officially rose to
national strategy. The fifth plenary session is opened a new chapter in the construction of
large data. In fact in 2015, "big data" issue is the guest of the executive meeting of the
State Council, "big data" strategy as early as the horizon. July, issued by the general
office of the State Council the about the use of large data strengthen of service and
supervision of the main market a number of opinions "put forward to improve the service
level of market main body, to strengthen and improve the market supervision ,to promote
sharing of government and social information resource open, improve the government
information integration platform, eliminate information isolated island, promote resource
data open to the society, it can enhance the credibility of the government, leading the
development of the society, serving the public enterprises. China's information for
consumer market size of the magnitude has rapid growth of three huge. To enhance the
network capability, resident consumption upgrading and the four modernizations to speed
up the integration and development background, new technology, new products, new
content, new services, new formats which continue to inspire new consumer demand and
as important means to enhance the experience of consumer information and data will be
in the field of industry get widely used[6].For the current development of manufacturing
industry and traditional manufacturing phase contrast, traditional manufacturing industry
faces great impact, such as in technology, process design, quality management,
production operations, need a big change deal with the industry under the premise of big
data challenge.

Very few papers provide mathematical or quantitative models, especially in a long

procurement lead time situation where forecasts are unreliable. Forecasts are not reliable
information about future demand, but they are the only source of information to procure
parts. Due to demand uncertainty, a safety stock margin may be used. This margin is
defined by a percentage that allows to order more parts than forecasts. For instance, with
a safety stock margin of 10% the system will order 10% more parts than forecasted.
Emergency supplies are used in case of shortages. This reflects the importance of
choosing the best forecasting method for the firm in order to reduce safety stock margin.
According to Yang and Baolin the forecasting methods can be generally divided into two
categories, namely, the qualitative forecasting methods and quantitative forecasting
methods. The latter methods include some traditional statistical methods, such as moving
average, exponential smoothing and multiple regression analysis.

In fact, auto sales are affected by many factors, such as the economic situation, state
policy, the income of the family, and so on. These complicated factors cause the
remarkable fluctuation and non-linear characteristics of the historic sales data, so some
data don't have trends and display high fluctuation, to solve the problem, some data
mining algorithms are applied to sales forecasting due to the complexity of sales data. J.
Scott Armstrong and Fred Collopy says that studies have been conducted to identify
which method will provide the most accurate forecasts for a given class of time series.
Conclusions about the accuracy of various forecasting methods typically require
comparisons across many time series. However, it is often difficult to obtain a large
number of series.

Error measures also play an important role in calibrating or refining a model so that it
will forecast accurately for a set of time series. According to Paul Dagum et.al
Forecasting models are dominated by uncertainty because salient, observable variables
define only a small subset of relevant variables; unmodeled influences can lead to
unexpected consequences in a dynamic process. In the Casual Forecasting method,
forecaster constructs a forecasting model that relates cost to the internal or environmental
variables believed to cause changes in the observed cost. A model, attempting to unveil
the structure and operation of a process that determines our requirement takes the form of
one or more equation, usually statistical in nature.