Market Demand Forecasting Models and their Elements in the Context of Competitive Market
TL;DR: In this article, the authors analyzed models of forecasting of market demand and the general principles of these models formation in the context of competitive market and presented the principles of efficient forecasting of the market demand in competitive market.
Abstract: Models of forecasting of market demand are analysed in the article and the general principles of these models formation in the context of competitive market are presented. Due to fast changing market conditions, intensive competition and necessity to solve relevant business bearing problems the demand of forecasting information connected with general market demand has increased. Mean experience of market demand forecasting in dynamic competitive market determines inaccurate results of the analysis of market demand and invalid decisions connected with companies’ activity. So it is considered to be especially relevant to compare present structures of market demand forecasting, and on that ground to form the principles of efficient forecasting of market demand in competitive market. The article starts with the analysis of conceptions of market demand forecasting and forecast while elaborating the conceptions of forecasting and forecast concretely. Later the analysis of market demand models and their specificity in the context of competitive market is presented. The surveys show that while researching the models of forecasting of market demand different opinions arise: some theorists maintain that the forecast of market demand is a concurrent part of forecasting of demand for a company’s products, whereas the others are sure that the exact forecast of market demand is impossible without an assessment of macroenvironment (external environment) or economic forecasting. The models of market demand forecasting, which are described in economic literature, are often intermittent, the consistency of the performance of forecasting is not clear. They also analyze limited number (often depending on the forecasting purpose) of the factors, which influence the competitive aspects of market demand. Sometimes the forecasting of market demand is based only on the choice of forecasting method and the analysis of the use in a concrete situation. The final actions of forecasting and assessment of completed forecasts accuracy is not often supposed. This determines roughness of the models of market demand forecasting and limited practical use in competitive market. With the reference to surveys of the models of market demand forecasting and their elements found in academic literature and given assessment of them, the model of market demand forecasting is considered to be a manystaged arrangement and relation between parts (elements), which aim to predict and assess the market demand and the tendencies of its alternation in competitive market in future. Not only the aspects of use of forecasting method are important for efficient market demand forecasting in competitive market but also how market demand is affected by the factor of forecasting frame. Formation of market demand’s forecasts based only on potentials of mathematical statistical method does not often take into account the influence of qualitative factors of competitive market demand and economic characteristics of market model. In pursuance of efficient forecasting of market demand in competitive market, it is recommended to combine an assessment of market demand emphasizing factors of business macroenvironment and the frame of industrial market and forecasting, which is based on quantitative analysis of information; to include into forecasting model such factors as aims and goals, assessment of the frame of market forecasting, selection of the method of market demand forecasting and forecast of market demand making.
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13 Aug 2017
TL;DR: A latent factor model is developed that integrates human mobility data, POI profiles, and demographic data to robustly model the POI demand of urban regions in a holistic way and is effective for identifying POI demands for different regions.
Abstract: Point-of-Interest (POI) demand modeling in urban regions is critical for many applications such as business site selection and real estate investment. While some efforts have been made for the demand analysis of some specific POI categories, such as restaurants, it lacks systematic means to support POI demand modeling. To this end, in this paper, we develop a systematic POI demand modeling framework, named Region POI Demand Identification (RPDI), to model POI demands by exploiting the daily needs of people identified from their large-scale mobility data. Specifically, we first partition the urban space into spatially differentiated neighborhood regions formed by many small local communities. Then, the daily activity patterns of people traveling in the city will be extracted from human mobility data. Since the trip activities, even aggregated, are sparse and insufficient to directly identify the POI demands, especially for underdeveloped regions, we develop a latent factor model that integrates human mobility data, POI profiles, and demographic data to robustly model the POI demand of urban regions in a holistic way. In this model, POI preferences and supplies are used together with demographic features to estimate the POI demands simultaneously for all the urban regions interconnected in the city. Moreover, we also design efficient algorithms to optimize the latent model for large-scale data. Finally, experimental results on real-world data in New York City (NYC) show that our method is effective for identifying POI demands for different regions.
58 citations
TL;DR: In this paper, a threshold vector autoregressive model was used to investigate the causality between the gold return and the yen depreciation rate and found that when the yen depreciated rate is greater than 2.62%, investing in gold could avoid the depreciation loss.
Abstract: Gold is the asset that has attracted people for thousands of years and this attraction continues to the present day because, according to Worthington and Pahlavani (2006), unlike most commodities, gold is durable, relatively transportable, universally acceptable and easily authenticated. The demand for gold is ever increasing, not only for jewelry, coins, and bars but also for many industries, such as electronics, space, as well as medical technology. Especially gold is still a form of currency in many countries after the collapse of the Bretton Woods system in 1971. Many economic analysts suggest that gold prices are determined and influenced by a number of factors, such as mine production, fabrication demand, and the recovery of gold from scrap. Much greater influence is exerted by trends in central bank sales and purchases. Most important of all is trend in investment demand. Investors buy gold for a number of reasons. They buy gold as a hedge against any economic, political, or currency crises. They also buy gold for diversification and financial arbitrage when investment confidence is increasing because they have the common sense that physical assets, unlike financial assets, are the best way to hedge against recession and inflation. The developments of the gold market are followed closely by financial analysts and monetary policy makers and gold price is regarded as a good criterion of the inflationary trend in the future for it moves earlier than official measures of inflation. Fisher (1930), the economist who first pointed out the relationship between expected inflation and interest rate, provides the theoretical basis for this study. Fisher (1930) concludes that expected nominal asset return comprises expected return and expected inflation rate. In other words, when expected inflation rises, asset return will rise. Later, the primary empirical test on inflation hedge of assets including U.S government bonds and bills, real estate, labor income, and stock returns was done by Fama and Schwert (1977). Ghosh et al. (2004) point out that people buy gold for two purposes. The first is the “use demand”, where gold is used directly in the production of jewelry, medals, coins, electrical components, and so on. The second is the “asset demand” for gold, where it is used by governments, fund managers and individuals as an investment. The asset demand for gold is traditionally associated with the view that gold provides an effective “hedge” against inflation and domestic currency depreciation. When it comes to inflation, the value of gold is considered to be preserved, for its price will increase along with the rise in the general level of prices. In other words, it is believed that a higher inflation rate is what gold prices said should be happening. However, the question is that how well gold hedge really works. Each country has its own economic conditions or characteristics. This issue is worth examining and verifying with non-linear model which might discover the key reasons that the linear model is unable to do.In this article, we attempt to examine whether gold could be an exchange rate hedge in Japan using data from 1986 to 2007. In the literature of this area, most research has focused on a linear relationship—rather than a nonlinear one—between returns on gold and the exchange rate of the Japanese yen. In the present paper, we used the depreciation rate of the yen as a threshold variable to distinguish between a high depreciation regime and a low depreciation (or appreciation) regime. With this setting, we build a threshold vector autoregressive model to investigate the causality between the gold return and the yen depreciation rate. We found that when the yen depreciation rate is greater than 2.62%, investing in gold could avoid the depreciation loss. This finding, that the effectiveness of gold as an exchange rate hedge depends on the depreciation rate of the yen, could be beneficial to Japanese government monetary policy and to investors with Japanese yen in their portfolios. JEL classification: C32; F31; F33
14 citations
Cites methods from "Market Demand Forecasting Models an..."
...…between gold return and yen exchange rate fluctuation in Japan from the viewpoint that there exist threshold effects in the 5 In the future, we will use the methods that proposed by Pilinkienė (2008a, 2008b) to construct forecast methods for gold return and the exchange rate fluctuation of the yen....
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TL;DR: In this paper, transaction costs are connected with searching and upholding reliable business partners, negotiation, formation of the contract and its control, and they take the significant part of all costs of any contract.
Abstract: The reduction of transaction costs prompts higher requirements and results in split of resources and production for an enterprise. However, in the process of globalisation, when trade barriers are falling down, transaction costs are becoming an increasingly important issue. Transaction costs are connected with searching and upholding reliable business partners, negotiation, formation of the contract and its control. For evaluation the negative factors of the economic decline, it is discussed whether it is worth joining in associations and making different procurement transactions during this period of the economic decline. Most companies in this period concentrate their effort on survival, but not on development, so business initiative obviously shrinks during such economic periods. What is more, it is significantly limited by increasing costs for credits and low liquidity of the stock markets. That is why transaction costs emerge because of the formal trade barriers such as import restrictions and tariffs. Transaction costs are inevitable as well as transport costs, and they take the significant part of all costs of any contract. Transfer costs economics, which previously was mostly used for the evaluation of outsourcing decision processes, now is considered to be an applicable theoretical background for outsourcing decisions.
12 citations
TL;DR: Tory and practical assumptions for the development of modern MAS adjusted with the environment of an organization and satisfying management needs of timely receiving the most relevant information with no surplus costs were examined.
Abstract: Management accounting (MA) studies disclosed the significance of MA for organizational change, progress and showed the benefit of a performance measurement process. This is the reason why management of organizations should have MA system (MAS) effectively providing information for decision-making at the acceptable costs. Issue of the right MA tools setting and correct transformation of existing system into the optimal one is not new. Nevertheless, the biggest part of scientific works related to MA is concerned with separate tools of MA and are fragmented. The main aspect of the relevance of this issue is the question what features should have modern MA and how should the existing MA systems be changed into modern ones. The objective of this paper is to examine theoretical and practical assumptions for the development of MAS adjusted with the environment of an organization. According to the mentioned objectives theoretical and practical assumptions for the development of modern MAS adjusted with the environment of an organization and satisfying management needs of timely receiving the most relevant information with no surplus costs was examined in this paper. The analysis of scientific literature, the systemization of results of different researches related to MA, the studies of business companies, the conduction of financial and managerial analysis, the synthesis of management/MA theories, methods and practical cases were made in this research. The research disclosed that MA could be assessed company-wide, seeking to find an optimal configuration of the local management accounting system (Technical - Managerial View). Also different MA theories, MAS of different companies can be compared and the best choice or conclusions can be achieved based on systemization of theories and practices (Pragmatic – Interpretive View). Besides that, relationship between MA and external environment in much wider context can be analyzed (Critical-Socio-Economic View). The performed analysis showed that MAS are strongly influenced by the internal, external environment and objectives of organization. Organizations differently pursue Return on Capital (ROE) maximization. Each type of organization has interim objectives helping them to cope with the obstacles of external/internal environment and to take advantage on possibilities. Companies performing in volatile environment use simpler MAS and vice versa, so different sets of MA tools should be applied to different types of organizations. This assumption is the key matter for the modern MA system creation. Basic principles of modern MAS development state that managers first of all should determine an organization type. Depending on that set of MA techniques adoptable to the particular organization should be determined and applied. Implementation of proposed MA tools demands to organize that on a project basis. Project team should be organized and an approval as well as the support of the top management is mandatory. Acceptance, support and involvement of all management and employees are necessary for a successful change of existing MAS. Constant monitoring of an organization type change, the assessing of MAS effectiveness and top management’s support is necessary for a successful functioning of modern MAS.
11 citations
Cites background from "Market Demand Forecasting Models an..."
...Pilinkiene (2008) analyzed market demand forecast methods, Gudonavicius, Bartoseviciene & Saparnis (2009) studied issues related to strategic management and Davidaviciene (2008) studied change management aspects....
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01 Jan 2011
TL;DR: In this paper, transaction costs economics has been the main outsourcing explanation model in economics, according to it, cost efficiency is achieved by performing transfers to different management mechanisms and encourage the appearance of strategic outsourcings.
Abstract: Attempting to reduce costs and understanding the motives of efficiency, business companies have started wide use of outsourcing. Transaction costs economics has been the main outsourcing explanation model in economics. According to it, cost efficiency is achieved by performing transfers to different management mechanisms. Although the research of outsourcing supply chain has significantly expanded, practical applications of the models of transaction costs economics and resources are still limited. That is why it is purposeful to develop these two outlooks and encourage the appearance of strategic outsourcings. This article is based on transaction costs economics and the studies of outsourcing contracts. In order to limit the opportunistic behaviour of service providers while making a contract, incentives and fines should be included as well as prices and monitoring conditions. There are many imbalances among descriptive models of outsourcing in both scientific literature and practical processes. The authors of this article introduce many constructive explanations of these imbalances and so contribute to the creation of new more practical outsourcing decision models.
5 citations
References
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TL;DR: The authors presents a wide range of forecasting methods useful for undergraduate or graduate students majoring in business management, economics, or engineering, including decomposition, regression analysis, and econometrics.
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TL;DR: In this paper, the authors present a theoretical framework for univariate time series forecasting from regression models based on the theory of time series and Spectral Analysis, and combine it with linear time series models.
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Posted Content•
TL;DR: The authors provide a formal analysis of the models, procedures, and measures of economic forecasting with a view to improving forecasting practice, and they find that conclusions which can be established formally for constant-parameter stationary processes and correctly-specified models often do not hold when unrealistic assumptions are relaxed.
Abstract: This book provides a formal analysis of the models, procedures, and measures of economic forecasting with a view to improving forecasting practice. David Hendry and Michael Clements base the analyses on assumptions pertinent to the economies to be forecast, viz. a non-constant, evolving economic system, and econometric models whose form and structure are unknown a priori. The authors find that conclusions which can be established formally for constant-parameter stationary processes and correctly-specified models often do not hold when unrealistic assumptions are relaxed. Despite the difficulty of proceeding formally when models are mis-specified in unknown ways for non-stationary processes that are subject to structural breaks, Hendry and Clements show that significant insights can be gleaned. For example, a formal taxonomy of forecasting errors can be developed, the role of causal information clarified, intercept corrections re-established as a method for achieving robustness against forms of structural change, and measures of forecast accuracy re-interpreted.
612 citations