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Thursday, December 27, 2007

Demantra forecasting models -Part1
Demantra spectrum product has a set of various mathematical models geared up for capturing various
demand patterns. It utilizes Bayesian modeling technique to combine the result of forecast generated by
individual 15 mathematical models. The final forecast doesn't merely represents results based on
prediction done by just selecting a mathematical model which can best fit the historical pattern of demand.
Demantra's patented Bayesian modeling forecasting engine, instead captures the qualitative prediction
done by multiple models and thus resulting in one of the best forecasting results in industry.

Oracle's Demantra Demand Management module only provides 9 basic mathematical models and 6
configurable Causal Factors, rest of the 6 advanced statistical models and flexibility of creating unlimited
Casual Factors are given away with Advanced Forecasting & Demand Modeling (AFDM) module.

Demand Management module's forecast library has following set of models for usage:
1. Regression
2. Transformation Model(log)
3. Regression for Intermittent
4. Holt
5. Croston for Intermittent
6. Combined Transformation Model(elog)
7. Multiplicative Monte Carlo Regression(CMReg)
8. Integrated Causal Exponential Model(BWint)
9. Auto & Linear Regression

Let's try to get a feel of what are these models and how they work ?
1. Regression: These models are statistical models which are capable enough of describing the
variation(trend/pattern) one or more variable(s), based on the variation of one or more other variable(s).
Inferences based on this kind of methodology are known as Regression analysis.
e.g. Variation of Demand of a product in market based on time variation.

2. Transformation Model(log): Log transformation model utilizes the log function which squeezes the
large values of data together and stretches the small values apart, thus leading to correction data issues like
skewed data, outliers and unequal variation.
e.g. Normally demand data has various such problems, the log transformation model tries to minimize
those.

3. Regression for Intermittent: This model uses regression analysis for intermittent kind of data. There are
parameters related to defining intermittent part of data in the application.

4. Holt: An extension of exponential smoothing can be used when time-series data exhibits a linear trend.

5. Croston for Intermittent: Croston’s Intermittent Model is specifically designed to deal with sporadic
demand (no seasonality) with a two-step process. Croston’s Intermittent model recognizes both : the
demand size and the demand occurrence.

6. Combined Transformation Model(elog): Works in both DP & PE mode of analytical engine run and is
combination of Transformation & CMReg model. This model performs CMReg operations on log
transformed time series.

7. Multiplicative Monte Carlo Regression(CMReg): This model comes into picture for both DP &PE
mode run as well, and utilizes long Causal Factors.

8. Integrated Causal Exponential Model(BWint): This also is a regression model, known as Multiplicative
regression - winter model. The model works only in DP mode. It runs multiplicative regression on Causal
data (short CFs) and then smooths out the residual series exponentially like HOLT. It helps modeling
Trends, Seasonality and Causality in demand data.

9. Auto & Linear Regression: It is available in DP mode run and includes auto-regression. Causal factors
which are used by this model are Constant & events.
NOTE: All the 15 models can be used by engine in DP mode run, while in PE mode following models are not available:
- ARIX, ARLOGISTIC, ARX, BWINT, FCROST, ICMERGR & IREGR

January 21, 2010

Model codes used in MDP_MATRIX

Filed under: Demantra,Demantra - DM,Demantra 7.3 — rajksingh81 @ 7:11 pm

Here is a list of the coding convention used by Demantra, when populating MDP_MATRIX with
information about which models were used(column MODEL) and which weren’t.(column DELMODEL)

H Holt
J Regression FOR Intermittent
K Multiplicative Monte Carlo Regression FOR Intermittent (ICMRegr)
L Transformation Model (log)
R Regression
E Combined Transformation Model (elog)
C Multiplicative Monte Carlo Regression (CMReg)*
B Integrated Causal Exponential Model (BWint)
F Croston For Intermittent
G Logistic*
A ARLogistic*
X Auto and Linear Regression (ARX)
V Integrated Auto and Linear Regression (ARIX)*
D DailyMultiplicativeRegression*

T Naive Holt
N Naive (if all models failed, a moving average forecast is generated)
NULL No forecast attempt made on this combination.
M Modified Ridge Regression*
NONE Combination remains non forecasted yet, not processed by engine.

E.g. MODEL column has value BFR for a combination, this means engine used models B, F and R to
generate Bayesian combined model forecast.

Detailed information about models and parameters is available in Demantra implementation guide.
Refer to “My Oracle Support”
Oracle Demantra Documentation Library [ID 443969.1]