In this week’s issue of Tips & Tricks, we consider the process of model comparison, as well as the selection of the best model.
Using a monthly total sales time series for Company X, we conduct our preparatory analysis and propose several ARMA models. Using a brute force approach, we examine every candidate model, calibrate its parameters, and validate the underlying model assumption(s). Your objective will be to compare the (surviving) models and choose the best candidate.
For details, or to download the document and/or the spreadsheet for this tutorial, go to “Sales Forecast Example – Models comparison and selection” on our website.