ISSN:2229-6093
Shridhar Kamble et al, Int.J.Computer Technology & Applications,Vol 5 (3),1112-1117
Sales Forecasting using Kernel Based Support Vector
Machine Algorithm
Shridhar Kamble Aaditya Desai
Thakur College of Engineering Assistant Professor (IT), TCET
Mumbai, India Mumbai, India
shridharkamble1@gmail.com aaditya1982@gmail.com
ABSTRACT
Due to huge applications, machine learning techniques are researched
more widely. This paper establishes a model of sales prediction based
on improved support vector machines, to forecast the sales data.
Support vector regression provides global optimal solutions which
avoid overtraining. To check the efficiency of forecasting model
various accuracy parameters are used, including Mean Absolute
Percentage Error (MAPE), Mean Absolute Deviation (MAD) and
Mean Squared Error (MSE) etc.
Development of an improved Sales forecasting model was done
which is based on kernel based support vector machine and other
optimization parameters. Traditional SVM classifier is a linear
classifier, Kernel approach gives nonlinear classifier and maximum
margin hyperplanes which in turn fit the maximum margin
hyperplane into a transformed feature space. Due to the non-linear
nature, kernel based SVM used to build the forecasting model to
improve the forecast precision.
Testing of forecasting model was done by applying it on apparel sales
data which was from 2009/01/01 to 2013/12/30. Forecasting model
was rerun and same dataset applies to various classical techniques
along with kernel based support vector machine algorithm to ensure
that the results are comparable. The obtained Results show that the
forecast efficiency of kernel based support vector machine was better
than classical approaches and traditional SVM.
Keywords
Simple Moving Average, Naïve Bayes, Exponential Smoothing,
Adaptive Rate Smoothing, Weighted Moving Average, Machine
Learning, SVM, MLP, Time series prediction, MAPE, MAD, MSE.
1. INTRODUCTION
Machine learning refers to a system that has the capability to
automatically learn knowledge from experience and other ways.
Classification and prediction are two forms of data analysis that can
be used to extract models describing important data classes or to
predict future data trends [3].
Performance analysis of classical and machine learning algorithms
including neural network and SVM is carried out. These algorithms
are used for classifying the actual sales data which were collected
from apparel manufacturing firm.
Experimental setup is done using c# implemented code in visual
studio. The goal of this research is to find the best classifier which
outperforms other classifiers in all the aspects and use best algorithm
to build a forecasting model which will give better forecasting
results.
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Priya Vartak
Thakur College of Engineering
Mumbai, India
priyanvartak@gmail.com
2. FORECASTING TECHNIQUES
All Classification and prediction are two forms of data analysis
that can be used to extract models describing important data classes
or to predict future data trends. Such analysis can help us to provide
with a better understanding of the large data. Classification predicts
categorical (discrete, unordered) labels, while prediction models
continuous valued functions. Classification technique is capable of
processing a wider variety of data than regression and is growing in
popularity. Classification is also called supervised learning, as the
instances are given with known labels, contrast to unsupervised
learning in which labels are not known. Each instance in the dataset
used by supervised or unsupervised learning method is represented
by a set of features or attributes which may be categorical or
continuous [1] [2].
Classification is the process of building the model from the training
set made up of database instances and associated class label. The
resulting model is then used to predict the class label of the testing
instances where the values of the predictor features are known.
Supervised classification is one of the tasks most frequently carried
out by intelligent techniques. The large numbers of techniques have
been developed.
2.1 Classical Techniques
2.1.1 Simple Moving Average
Simple Moving Average is the most basic forecasting method.
Procedure to do forecasting using Simple Moving Average is as
follows,
 Take data from last N periods
 Average the data
 Use average to forecast future period
(1)
Where, Ft = forecast for period t
St-i = data
N = Number of time periods
2.1.2 Weighted Moving Average
Simple moving average gives equal weight to all the data, the
weighted moving average can give more weight to more recent data.
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Shridhar Kamble et al, Int.J.Computer Technology & Applications,Vol 5 (3),1112-1117
(2)
Where, w t-i = weight given to data at period t-i
2.1.3 Exponential Smoothing
Exponential smoothing is the forecasting technique that weights
the last forecast and the most recent data. Exponential smoothing is a
technique that can be applied to time series data, either to produce
smoothed data for presentation, or to make forecasts.
(3)
If actual data point was above the last forecast, it would tend to move
the future forecast up and if the data point was below the last
forecast, it would tend to move the future forecast down.
2.1.4 Adaptive Rate Smoothing
Adaptive rate smoothing modifies the exponential smoothing
technique by modifying the alpha smoothing parameter for each
period's forecast by the inclusion of a Tracking Signal. This is a
technique shown to respond much more quickly to step changes
while retaining the ability to filter out random noise.
2.1.5 Naïve Bayes
A naive Bayes classifier is a simple probabilistic classifier based
on applying Bayes' theorem with strong (naive) independence
assumptions. A more descriptive term for the underlying probability
model would be "independent feature model". Depending on the
precise nature of the probability model, naive Bayes classifiers can be
trained very efficiently in a supervised learning setting. In many
practical applications, parameter estimation for naive Bayes models
uses the method of maximum likelihood; in other words, one can
work with the naïve Bayes model without believing in Bayesian
probability or using any Bayesian methods [2][3].
2.2 Neural Networks
2.2.1 ANN
Artificial Neural Network (ANN) is a Machine learning
techniques which largely used in forecasting, assists multivariate
analysis [7]. Many research activities were done to optimize the
usage of ANN for forecasting in the past decade. ANNs provide a
great deal of promise, but it also uncertain in behavior. Till the date
researchers are still not certain about the effect of key factors on the
forecasting performance of ANNs.
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Fig 1: Artificial Neural Network Architecture
Neural architecture consisted of three or more layers, i.e. input layer,
output layer and hidden layer as shown in Figure 2. The function of
this network was described as follows:
(4)
Where, Yj is the output of node j, f (.) is the transfer function, wij the
connection weight between node j and node i in the lower layer and
Xij is the input signal from the node i in the lower layer to node j.
Artificial Neural Network(ANN) largely used in forecasting,
assists multivariate analysis. Multivariate models can rely on
greater information, where not only the lagged time series being
forecast, but also other indicators (such as technical,
fundamental, inter-marker etc. for financial markets), are
combined to act as predictors. In addition, ANN is more effective
in describing the dynamics of non stationary time series due to
its unique non-parametric, non-assumable, noise-tolerant and
adaptive properties. ANNs are universal function approximators
that can map any nonlinear function without a prior assumptions
about the data [2].
2.3 Support Vector Machines (SVM)
2.3.1 Support Vector Machines (SVM)
Support Vector Machine (SVM) is a Machine learning
techniques comes under classification method which was based on
the construction of hyperplanes in a multidimensional space Support
vector machine (SVM) is a useful technique for data classification,
regression and prediction. For Given a set of training examples, each
marked as belonging to one of two categories, an SVM training
algorithm builds a model that predicts whether a new example falls
into one category or the other. SVM model is a representation of the
examples as points in space, mapped so that the examples of the
separate categories are divided by a clear gap that is as wide as
possible. New examples are then mapped into that same space and
predicted to belong to a category based on which side of the gap they
fall on.
A linear support vector machine is composed of a set of given
support vectors z and a set of weights w. The computation for the
output of a given SVM with N support vectors z 1, z2, … , zN and
weights w1, w2, … , wN is then given by,
(5)
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2.3.2 Kernel Based Support Vector Machines systems the utility will be unable or unwilling to maintain. Earlier
The original optimal hyperplane algorithm proposed by statistical methods were used for forecasting. A time series model
Vladimir Vapnik in 1963 was a linear classifier. However, in 1992, was constructed solely from the past values of the variables to be
Bernhard Boser, Isabelle Guyon and Vapnik suggested a way to forecast.
create non-linear classifiers by applying the kernel trick (originally
proposed by Aizerman et al.) to maximum-margin hyperplanes. The
resulting algorithm is formally similar, except that every dot product
is replaced by a non-linear kernel function. This allows the algorithm
to fit the maximum-margin hyperplane in a transformed feature
space. The transformation may be non-linear and the transformed
space high dimensional; thus though the classifier is a hyperplane in
the high-dimensional feature space, it may be non-linear in the
original input space.

Using kernels, the original formulation for the SVM given SVM with
support vectors z1, z2, … , zN and weights w1, w2, … , wN is then
given by,

(6)

2.3.3 Standard Kernels

2.3.3.1 Linear Kernel
The Linear kernel is the simplest kernel function. It is given
by the common inner product <x,y> plus an optional constant c.

(7)

2.3.3.2 Polynomial Kernel

The Polynomial kernel is a non-stationary kernel. It is well
suited for problems where all data is normalized.

(8)

2.3.3.3 Gaussian Kernel

The Gaussian kernel is by far one of the most versatile
Kernels. It is a radial basis function kernel, and is the preferred
Kernel when we don’t know much about the data we are trying to
model.
Fig.2 Predictive Modeling using Data Mining

3.1 Learning Algorithm

(9)
3. FORECASTING METHODOLOGY
Predictive modeling is the process by which a model is created to
predict an outcome. If the outcome is categorical it is
called classification and its called regression when the outcome is
numerical. A good forecasting system has qualities that distinguish it
from other systems. The qualities provide a useful basis for
understanding why good forecasting systems outperform others over
time. If users understand the rationale of a forecast, they can appraise
the uncertainty of the forecast, and they will know when to revise the
forecast in light of changing circumstances. The more accurate a
forecast is, the better are the decisions that depend upon it.
Inaccurate forecasts lead to too much or too little capacity and can be
very costly. Forecasts cost money, time and effort. Added expense
must purchase added accuracy, flexibility, or insight. A sophisticated
forecasting system requires ample staff resources and technical skills
for maintenance. The Choice of a forecasting system must include a
commitment to the resources necessary to maintain it and avoid
John Platt proposed a Sequential minimal optimization (SMO)
algorithm in 1998, which is used for solving the quadratic
programming (QP) problem that arises during the training of support
vector machines. Sequential Minimal Optimization (SMO) is a
simple algorithm that can quickly solve the SVM QP problem
without any extra matrix storage and without using numerical QP
optimization steps at all. SMO decomposes the overall QP problem
into QP sub-problems, to ensure convergence [7].
4. EVALUATION PARAMETERS
To evaluate the performance of forecasting techniques certain
evaluation parameters are used. These are MAPE, MAD and MSE
etc. The forecast error is the difference between the actual value and
the forecast value for the corresponding period.
(7)
Where, E is the forecast error at period t, Y is the actual value at
Period t and F is the forecast for period t.

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Shridhar Kamble et al, Int.J.Computer Technology & Applications,Vol 5 (3),1112-1117

Following are the Measures of aggregate errors; 6. EXPERIMENTAL RESULTS
Proposed methodology is applied to a real-world sales data, as
 Mean Absolute Percentage Error (MAPE) company wants to predict the number of units that will be sold the
following month, quarterly or yearly, for 6 different products
depending upon category. Consequently, we analyzed 5 time series
(8) representing Monthly sales data, during the period that runs from
January 2009 to December 2013 each. Figure 3 shows one of these 5
series. We applied the propose methodology to the 5 time series using
 Mean Absolute Deviation (MAD) initial features (independent variables). As a result we obtained for
each series a different set of parameters describing the respective
model.
Along with the application of our methodology using kernel
(9) based support vector machines (K-SVM), we utilized the same
framework with neural networks and Classical techniques(Out of all
 Mean squared error (MSE)
classical methods we have selected only Naïve approach due to
consistent results among other classical approaches) also. Tables 2, 3
and 4 show the accuracy error measures of mean absolute percentage
(10) error (MAPE), mean absolute deviation (MAD) and mean squared
error (MSE), obtained over the test set, by using the 3 forecasting
5. DATA PREPARATION methods for predicting sales for six products. The best result for each
product is underlined.
Classical algorithms including Simple Moving Average,
Weighted Moving Average, Exponential Smoothing, Adaptive Rate
TABLE II. MEAN ABSOLUTE PERCENTAGE ERROR
Smoothing, Naïve Bayes and Machine learning schemes such as
SVM and Artificial Neural Networks are implemented using C# Classical
programming language and .net platform using visual studio IDE. Product ANN K-SVM
(Naive)
Machine with windows 7 operating system and 2 GB of RAM is used P1 0.0792286 0.09923459 0.0743525
to conduct the experiments and analyze the results. All experiments P2 0.08635483 0.0874248
0.0542286
were rerun to ensure that the results are comparable. Detailed survey
is carried out in “Creative Handicrafts”, Mumbai and data collection P3 0.0992286 0.09835635 0.0835635
is done related to actual sales of manufactured apparels in the P4 0.0862286 0.1032769 0.0785831
company. P5 0.0892286 0.07792624 0.0794248
P6 0.0972286 0.10841386 0.0941381
Avg. 0.0842286 0.09559379 0.08291446

As we see in the above table the observed value of MAPE for

K-SVM is lower than the other techniques except the few cases.

TABLE III. MEAN ABSOLUTE DEVIATION

Classical
Product ANN K-SVM
(Naive)
P1 0.2774248 0.25823926 0.2313461
P2 0.2491538 0.29823926 0.2487574
P3 0.2844138 0.2728239 0.2918824
P4 0.2774248 0.32823926 0.3182393
Fig. 3 Quarterly apparel’s sales data P5 0.2974148 0.30296282 0.2762824
P6 0.2874871 0.29782393 0.2678239
There are three category of apparels are manufactured namely Avg. 0.2788865 0.29305473 0.27238858
Menswear, Woodenware and Kids ware. We have selected Men’s
Category from product details. The Product details along with the In the Table 3, the observed value of MAD for K-SVM is lower than
category are as follows; the other Classical technique and ANN except the few cases.

TABLE I. PRODUCT DETAILS TABLE IV. MEAN SQUARED ERROR

Classical
Category 1 Category 2 Category 3 Product ANN K-SVM
Product (Naive)
Men’s Women’s Kids
P1 Shirts Shirts Shirts P1 119.11536 108.886481 99.886481
P2 Trousers Trousers Trousers P2 117.41536 102.64577 104.936977
P3 T-Shirts Dress T-shirts P3 118.17436 111.123645 89.123645
P4 Jeans Jeans Jeans P4 109.94336 116.239836 98.239836
Kurtas &
P5 Kurtas Dress P5 109.88536 111.465725 113.465725
Kurtis
P6 Jackets Sarees Shorts P6 118.41536 106.917582 104.78652
Avg. 115.49152 109.546506 101.739864

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Shridhar Kamble et al, Int.J.Computer Technology & Applications,Vol 5 (3),1112-1117
In the Table 4, the observed value of MSE for K-SVM is lower than
the other Classical technique and ANN except the few cases.
As we get contradictory results for some specific products, but the
average error levels confirm that the proposed K-SVM methodology
consistently outperforms ANN and Classical results, for all the three
error measures of MAPE, MAD and MSE. This confirms the ability
of the proposed methodology to provide accurate forecasts.
7. CONCLUSION
In this research paper, many time series forecasting methods are
discussed and compared a number of widely used techniques
for time series modeling and forecasting (prediction). We have
done an implementation of each technique and observe how each
method works. Among these methods, different methods were
encountered; pure statistical models like SMA, Naïve, WMA, ES
and machine learning based methods like Support Vector
Machines and Neural Networks. Different methods have their own
strengths and weaknesses depending upon different approaches and
they used.
Different methods fit in for different situations so understanding and
interpreting the problem is required before choosing a technique to
predict data. Specially, understanding data prior to algorithm
selection is a major rule of thumb in data mining and related
fields. The performance of these algorithms can be improved in
various ways. Pruning decision spaces, cleaning and preprocessing
time series data, improved coding standards, distributing
computation among different nodes can be considered as few
general improvements.
The conclusion to arrive at this point is that no single techniques are
perfect, there are situations where one method would fit into a
problem than another but this might be different for another
problem. So selecting a proper technique to analyze and forecast
time series data, one should have a sound and comprehensive
understanding of the problem domain.
Due to the significance of forecasting in many fields such as
stock prediction, medicine, biology, economics and many other
cutting edge research areas, researcher’s contributing towards
developing better approaches for time series prediction So the
importance and impact of better time series prediction models
are obvious as making decisions about th e future is becoming
increasingly important and critical in many competitive
organizational structures.
8. ACKNOWLEDGMENTS
This research paper is made possible through the help and support
from Mr. Aaditya Desai. I would like to thank him for his valuable
advice, guidance and help. Special thanks to Mr. Johny Joseph,
Executive Officer of Creative Handicrafts Mumbai. He gives us an
opportunity to explore the company procedures and doing surveys in
the company.
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Fig.4 Mean Absolute Percentage Error

Fig.5 Mean Absolute Deviation

Fig.6 Mean Squared Error

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