I am new to R and forecasting. I have access to weekly data (104 weeks) for a certain SKU, its value and volume sales and a few promo variables.
Promo 1 and Promo 2 are continuous variables (unfortunately Promo 1 is 0 here for this SKU) while Promo 3 and Promo 4 are categorical variables.
I tried forecasting the volume sales for this SKU for the next 72 weeks. I included dummy variables using
actual_vol = ts(data$Volume , frequency =52) dummy = seasonaldummy(actual_vol) xreg = cbind(data$Promo1 , data$Promo2 , data$Promo3 , data$Promo4 , dummy) fit = auto.arima(actual_vol , xreg = xreg)
I am trying to forecast sales for the next 72 weeks by keeping my promo variables as 0 (basically baseline sales). I used
seasonaldummyf and promo variables as 0 for forecast.
As you can see the forecast looks exactly the same as the previous data (same as using
snaive) and it seems promo had no effect at all on volume sales.
Kindly let me know if the method is correct and if not how can I improve it.