The Prediction of Purchase Quantity and Timing: A Latent HB Model
Date Issued
2005
Date
2005
Author(s)
Chen, Ching-I
DOI
zh-TW
Abstract
The prediction of purchase quantity and timing has very important strategic implications. Purchase quantity prediction can provide a criterion for retailers’ assortment strategy and manufacturers’ production planning; purchase timing prediction can help firms to decide the timing to put strategies in practice. The relationship between marketing strategies and purchase quantity and timing are also important indices to measure marketing performance. The two purchase behaviors were often viewed as independent but not interdependent response variables in previous related literature. This paper attempts to construct a prediction model of the two purchase behaviors based on the concept of the inventory consumption model. However, the inventory consumption behavior of customers is unobservable in nature, so this employed the concept of data augmentation to model this unobservable response variable. Besides, this paper adopted hierarchical Bayesian (HB) approach to combine three analysis levels of models to incorporate each kind of information from data, including the inventory consumption model of unit timing level, the purchase quantity and consumption rate model of purchase timing level, and the marketing effects model of individual customer level.
To examine the relative advantage of hierarchical Bayesian models, this paper formed an eight-scenario simulation analysis to compare the ability of parameter estimation recovery and behavior prediction validity of hierarchical Bayesian (HB) approach to traditional ordinary least square (OLS) approach. The comparison results showed that in each scenario the HB approach had dominant advantage over the traditional OLS approach and this result demonstrated the validity of HB approach. Moreover, we employed the purchase records of every gas station of a domestic leading petroleum brand to investigate the validity of HB approach, and the empirical result also showed that the HB estimators of purchase timing level had the best predictive ability.
Subjects
存貨消耗模型
層級貝氏模型
資料擴充
Hierarchical Bayesian Model
Data Augmentation
Inventory Consumption Model
Type
thesis
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