Expert Systems with Applications 38 (2011) 15291536

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Expert Systems with Applications

journal homepage: www.elsevier.com/locate/eswa

A two-stage dynamic sales forecasting model for the fashion retail

Yanrong Ni , Feiya Fan
School of Mechanical Engineering, Shanghai Jiaotong University, Shanghai 200030, China

a r t i c l e

i n f o

a b s t r a c t
The difculty with fashion retail forecasting is due to a number of factors such as the season, region and fashion effect and causes a nonlinear change in the original sales rules. To improve the accuracy of fashion retail forecasting, a two-stage dynamic forecasting model is proposed, which is combined with both long-term and short-term predictions. The model introduces the improved adjustment methods, the main adjustment model and error forecasting model in the adjustment system collaborated with each other. The real-time data are demonstrated by applying the model in wireless mobile environment. The experiment shows that the model provides good results for fashion retail forecasting. 2010 Elsevier Ltd. All rights reserved.

Keywords: Two-stage Sales forecasting The improved adjustment methods Neural networks Fashion retail

1. Introduction The forecasting plays an important role in the supply chain management of the fashion retail. The sales forecasting is the basis for the manufacturer making the production planning, the company making the sales planning, the company making the allocation planning to each distributor and store in the distribution network. It is also the basis for the daily decision making regarding transferring of goods to different distributors and stores. The characteristics of fashion retail are the complex distribution network and the short life of fashion products. At the same time, the design, production and sales of fashion products such as apparel, shoes, cap and bedding are affected by different factors such as the season, region and fashion. These factors make it difcult to accurately forecast the sales of fashion products. The production of the fashion products has a certain seasonal nature; it is generally divided into two production stages as spring and summer, autumn and winter. The traditional method is to, rst of all, according to the history data and the experience to forecast the next year sales, then as per the forecasting result, establish the whole production planning, goods distribution planning and sales target for each store, as well as to found producing proportion for different patterns. All of these will form a draft of the whole sales planning then commence the preparation for production. The time spent is always as long as 56 months. The production process is divided into two stages: the rst stage will produce 60% of the products, after around two weeks of marketing test, as per the market reaction, it must be decided whether it is necessary to continue the remaining 40% of production. The distribution

section will continue 56 months, since the designing of fashion goods and manufacturing process will always continue as long as 5070 days, if the production demand changes and needs an additional production. Normally, it already misses the fast-changing market opportunity when the product nished. One of the reasons is the time taken for designing and manufacturing process, and the other important reason is inaccurate sales forecasting. (1) Inaccurate annual sales forecasting. Since the traditional method cannot make sure the accuracy of sales forecasting, the main production planning, annual sales planning and stores allocation planning that are based on sales forecasting will deviate from the actual sales of the fashion retail section, in the event that is difcult to make the additional production, a lot of market opportunities will be lost. (2) Lack of real-time sales forecasting. During the store selling process, if one store is out of stock, the factory cannot supply additional products, so they can only transfer this product from other stores. The traditional method is performing the forecasting as per personal experience, which is not able to guarantee the accuracy and speed, not able to accurately determine market changes and not able to make speedy response to the demands of market and customer. Hence, this article supposes no change in the design and production cycle time and considers how to improve the precision of forecasting from long-term forecasting (annual, quarter, monthly forecasting) and short-term forecasting (weekly, daily forecasting). 2. Literature review

Corresponding author. Tel.: +86 021 62932020, mobile: +86 13817198952; fax: +86 021 62932070. E-mail address: yanrong_ni@hotmail.com (Y. Ni).
0957-4174/$ - see front matter 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.eswa.2010.07.065

The traditional forecasting methods of fashion retail are moving average, exponential smoothing, seasonal index, trend extrapolation

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and regression analysis, etc. The advantages of these models are being simple, mature and easy understanding algorithm. But the factors considered by these models are simple, only suitable for the conditions that have large amount of data, less factors and near linear. For the fashion retail, since the product has short life cycle, the actual sales will be affected by large amount of nonlinear, nonnumeric and accidental factors such as climatic factors, fashion change, market price change; it will cause the actual sales curve showing a high dimension and complexity. The forecasting model based on the data mining adopts some mature algorithm and technology used in the eld of articial intelligence, which is able to resolve many problems raised in traditional forecasting algorithm, and becomes a new hot research in the sales forecasting eld. Approximately, it can be divided into the following research directions. (1) Portfolio selection of different forecasting models. The combination forecasting methods utilize a reasonable weight to combine organically a number of single models. The difculty with direction is the selection of model base and the determination of the optimal weights. Zhu and Yan (2004) provided a portfolio selection method for model base evaluation, which adopts satisfaction weighting and decides the participation of meta-model. Thomassey and Happiette (2007) proposed NCC model based on neural technique (Self-Organizing Map and Probabilistic Neural Network) to estimate sales proles of new items in the Textile-ApparelDistribution network. (2) To improve one model, Doganis, Alexandridis, Patrinos and Sarimveis (2006) provided a forecasting model combined with radial basis function (RBF) neural network and genetic algorithm. Thomassey, Happiette and Castelain (2005) adopted Fuzzy logic technology and articial neural network, considering all external and internal factors, and used AHFCCX model to quantitative variables by fuzzy technology then used neural network algorithm to establish medium range forecasting model add the actual sales value to adjust the model and perform short-term forecasting. Au, Choi and Yu (2008) propose the evolutionary neural network (ENN) for sales forecasting in fashion retailing, which can converge faster when guided with the BIC and the pre-search approach. (3) Adjustment method. To calibrate the error of forecasting, mainly research the error theory of model, the importance is the error estimation and error compensation (adjusted value) which is mainly used in automation area. Xi, Xu, and Zhang (1989) proposed a main strategy that introduce the error forecasting, establish a multi-layer and comprehensive forecast that the error forecast supplementing the model forecasting. Ramesh, Mannan and Poo (2000) used a predictive model that was capable of predicting the error in the machine tool for any specic temperature condition that might be encountered. To facilitate the compensation of surface errors in machining of complex low-rigidity components caused by deection, the methodology (Wan, Xiong, Zhao & Wang, 2006) is based on modeling and prediction of cutting forces, analysis and prediction of deection of the part during machining and analysis of the resultant surface errors and their compensation. The research of this topic mainly focused on the following aspects: (1) The forecasting adjustments based on time series. Use the forecasting model of ARMA time series, according to the principle of minimum variance forecasting, calculate the optimal forecasting value of errors, Weigui, Xueli and Bao (2004) use the forecasting model error based on time series to replace the original model error. It cali-

brates the rolling optimal control of dynamic matrix control system (DMC). To promote the dynamics of forecasting, Geng Lirong (2004) used exponentially weighted smoothing model to replace the ARMA model, through the real-time detection and forecasting of servo follow errors, results in the contour error pre-compensation, dynamically pre-calibrate the interpolation output and realize the closed-loop control, improve the precision of contour process. (2) The forecasting adjustments based on neural network. Aburto and Weber (2007) adopted ARIMA (Auto-regressive Integrated Moving Average) model forecasting for the original time series data, used neural network algorithm and combined with other factors to establish forecasting error model, then added these two parts as the nal and hybrid forecasting model. Aiming at the series with small samples, seasonal character, nonlinearity, randomicity and fuzziness, a wavelet support vector machine (WN m-SVM) (Wu, 2009) is proposed based on wavelet theory and modied support vector machine which is applicable in car sale series forecasting. As a whole, the algorithm of neural network has some disadvantages such as local optimization, low speed of convergence and complex algorithms. Sun, Choi, Au and Yu (2008) applied a novel neural network technique called extreme learning machine (ELM) to investigate the relationship between sales amount and some significant factors that affect demand (such as design factors). (3) The adjustments with least square collocation. The sum of least error squares is to nd out a best solution. Ekman, Hong and Soderstrom (2006) adopted separable variable nonlinear least squares collocation to identify and forecast the linear measurement error of nonwhite noise has a good correction effect for the nonlinear system with large disturbance. (4) Semi-parametric regression adjustment method. It tries to provide a feasible theory instruction from the theory research for all models including adjustment methods, so as to summarize and describe a lot of problems. It is so dif kov z cult, and the theory system is not yet complete. Bu and Lumley (2008) and other people have done an in-depth research for this article. For the problem that the long-term forecasting model is easy to be affected by the irregular factors, it provides a semi-parameter log-linear regression model, and it was veried by the medical research data. Fischer and Hegland (1999), Minghai (2000) and other people studied the semi-parameter by applying on the system error estimation. The difculty with fashion retail sales forecasting is that a number of factors affect and cause a nonlinear change in the original sales rules. In summary of the above, the current mathematic tools are not enough for the demands of fashion retail forecasting. Under these circumstances, this article will introduce the improved adjustment methods. The main adjustment model and error forecasting model in the adjustment system collaborate with each other, and they are able to promote forecasting precision. The improved adjustment methods that allow the main forecasting model have a larger error, and it have strong fault tolerance and wide application, and due to the adjusting function of error forecasting model, the nal forecasting result of the system will not be sensitive to the result of main forecasting model and strong robustness. The veracity of the short-term prediction in the fashion retail is partly rely on the accurate and rapid real-time sales data that become true in the Mobile Commerce (M-Commerce) environment. M-Commerce which is a subset of E-Commerce means that

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commerce activities can be got along by the wireless mobile environments such as PDA integrated with Internet. The advantages of M-Commerce are being open, real-time, portable and expansibility. The corresponding researches of mobile terminal are as follows. (1) Date collection approaches of mobile terminal are widely used, such as SMS, IVR call center, PDA, RFID and GPS. (Chang, Chen & Zhou, 2008; Kim, Oh, Cho & Seo, 2008; Mahmoud & Yu, 2006). (2) Data transmission approaches of mobile terminal are proposed, such as XML, semantic model. Tajima (2007) discussed a novel mobile agent platform that can be used for comparison shopping in a mobile wireless environment, that helps better understand and communicate with the mobile consumer. Kangasharju, Lindholm and Tarkoma (2007) analyzed the requirements that the environment places on such a system and elaborated on these requirements by concentrating on three components namely XML processing interfaces, XML serialization and message transfer protocols. Artail, Shihab and Safa (2009) presented a distributed mobile database system that was proposed for implementation on Bluetooth-enabled mobile devices. (3) Data display approaches of mobile terminal are focus on SMS and WAP. The uniform display frame is hard to get because of the diversiform mobile terminals (Kundu, Mukherjee, Majumdar, Majumdar & Ray, 2007). After all, at present, there is lack of the research on the sale prediction model integrated with M-Commerce.

Forecasting as per the product combination: combined forecast according to different companies in different product categories, such as forecast to the wallet type clothing or forecast to the knitted clothing. Forecasting as per the stores combination: combined forecast to the stores according to different region, such as forecast to the stores in one region or forecast to one store. The closed-loop control structure of the dynamic sales forecasting system is presented which takes forecasting model as function, the history data as input data, and the real-time data as disturbance data. The core is the second-stage sales forecasting model. The rst stage is long-term sales forecasting, which is to forecast the sales for the next year (quarterly, monthly) in this year. The second stage is short-term sales forecasting, which is to forecast the sales for a short period of time (weekly, daily) after the selling. The rst-stage forecast is based on the history data (such as the history data of the sales quantity and prot in each store) and the factors (such as season, climate and region) in long-term sales, which shows use adjustment method to improve the model and forecast the next year sales. From the information terminal, the second stage will introduce real-time sales data and short-term external disturbances (such as nature condition change, for example raining, the uctuation of different economic factors such as the promotion and different social factors change such as the holiday) to make the short-term sales forecasting, dynamically and periodically, update the model by one week, determine the additional production and allocation of products in different stores. The closed-loop sale forecasting framework is given as layers in Fig. 1 (1) Data collection layer where the distribution information of product, store, prots, temperature, etc. is collected by all kinds of mobile terminals. (2) Data transportation layer where the different format information from different time, area and terminal is transformed into uniform format in the wireless network. (3) Data storage layer where uniform data storage platform is integrated and managed all kinds of original data from data transportation

3. The framework of the two-stage sales forecasting model The target of fashion retail forecasting is to forecast the future sales quantity and prot. It forecasts as per the two combination methods:

Fig. 1. Framework of dynamic sales forecasting techniques for fashion retail.

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layer. (4) Prediction approach layer where the mathematics model is established and maintained by receiving the data from data storage layer. (5) Application layer where sale prediction software module displays the prediction results and communicates with decision maker. (6) Decision layer where all management planning is based on the prediction results from application layer.

4. Sales forecasting methods based on the improved adjustment model This article establishes an improved adjustment model, which is used for modeling of fashion retail forecasting. The body of this model is ART time series forecasting model and combined with the multi-variables error forecasting model based on neural network algorithms. Refer to Fig. 2 for the basic structure. ART model is a nonlinear mapping model based on decision tree algorithm, and it is able to accept a large number of data as the input. The forecasting result is similar to the rational form and relatively easy to understand. The modeling speed is fast, and it is suitable for the main time series forecasting model of fashion retail forecasting adjustment model. The error forecasting model is only focusing on how to promote nonlinear complex forecasting ability with multi-variables, which is precisely the neural network methods are good at. 4.1. ART forecasting model ART is combined with auto regressive technology (Auto-Regressive, AR) and decision tree algorithm technology modeling for the time series data. ART model uses time series after event transfer-

ring as a basic data and divides it into many small sections (leaf node). Each leaf node includes one AR linear regression model, and the boundary of each section is dened by the decision tree. This model structure allows ART to have more advantages (Meek, Chickering, & Heckerman, 2002) than traditional AR model and neural network model, such as it is able to process nonlinear relation data and modeling for periodic data. The simple section linear forecasting makes the forecast result easy to explain with a short learning time. Since there are above advantages, in addition, it was promoted from the widely used AR regression model. All these make ART model very suitable for the application background of the sales forecasting with short cycle time, dynamics and complexity. The parameters of the ART model are so sensitive that are optimized by experimentation. Thus, four prediction models are found that are quantity and prots of sale prediction according to product and store.  First, evaluation function that is RRSE (root relative squared error) is dened.

v uPte 0 2 u t s y i y i RRSE t Pit e 2 it s yi y

y is the real sale quantity or prots, y0 is the prediction sale quantity  is the average of the real prot, ts is the begin date of the or prots, y evaluation, and te is the end date of the evaluation.  Next, the ranges of the parameters are regulated. COMPLEXITY_PENALTY = {0.9};

Fig. 2. Structure of improved adjustment model.

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MINIMUM_SUPPORT = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20}; PERIODICITY_HINT = {{12}, {3, 12}, {4, 12}}; MISSING_VALUE_SUBSTITUTION = {0}; AUTO_DETECT_PERIODICITY = {0.0, 0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0.9}; Among this, some important parameters of ART model are dened as follows.  PERIODICITY_HINT: periodicity hint. The sales value of a company in one month can be dened to one cycle per one year (12 months). In this cycle, the sales value of each month should be similar to that of the same month of next year (after 12 months); in the mean time, the parameter of PERIODICITY_HINT is {12}.  MINIMUM_SUPPORT: designate the minimum cases contained in each leaf node.  MISSING_VALUE_SUBSTITUTION: designate the method of lling blank history data, here set as 0.  HISTORIC_MODEL_COUNT, HISTORIC_MODEL_GAP: dene the quantity of history model that needs to be established and designate the interval between two history models. Finally, through traversing of model parameter combination, to establish a series of ART models to simulate forecasting, a selection from all the forecasting results as per evaluation function should be performed and the nal sequence parameters must be obtained when each model is in minimum condition. Then, the accuracy of the model established by this sequence parameter has a certain promotion.

Finally, according to the analysis result of some documents, combined with self-experience and following the above three principles, this article selects season, climate, holiday, promotion, region and price as the main inuence factors of the fashion retail. For two stages of long term and short term, the inuence factors of error modeling are also divided into two parts. In the rst long-term error forecasting model, the factors of season, climate and region have a great inuence to the sales in a relative long time span, but rare change in a short period of time, so they are regarded as inuence factors of long-term forecasting error model. For the second short-term forecasting, one outstanding feature of the real-time sales curve is not only following the long-term basic sales trend but also creating deformation disturbance continuously caused by different factors. For the sales inuence factors that created real-time disturbance, the selection principle is that it has great inuence to the short-term sales, such as fast change in daily temperature, raining, holiday and daily average discount and has a great inuence for the fashion retail, so it is regarded as the input parameter of short-term error forecasting model. Since there are big discrepancies between each input parameter, sometimes it may have several orders of magnitude discrepancy. Such as the holiday factors variables normally is in rst order of magnitude, but one brand clothes may have monthly sales of tens of thousand pieces . In this time, it is needed to standardize the input variables to the same range value; otherwise, the variables with bigger value will dominate the model training process. That the input parameters are converted into [1, 1] is the simple way:

Pn 2 p pmin =pmax pmin 1

4.2. Multi-parameter error forecasting model In the problems of error modeling forecasting for sales forecast, since the forecasting result data of the main time series model adopts neural network for the modeling and the sampling size of this part is relatively small, it is able to avoid the occurrence of normal problems such as large amount of date with low convergence and easy to involve in the local optimal solution. BP network is a kind of neural network study algorithm that studies on the multi-layer feed forward neural network. The neural network consists of one input layer, one or more hidden layers and one output layer. First, the input parameters of neural network should be selected that highly affect the accuracy of the results, such as season, climate, forecasting value of ART main model output, etc. Second, select the forecasting result (sales quantity, sales prot) error of ART model as the output of error forecasting model. The research for the inuence factors of fashion product sales is a complex and multi-disciplinary systematic topic. Frank and Garg (2003) summarized the following selection principles regarding the main sales inuence factors. (1) Self-change has a big inuence to the sales prot and quantity. (2) Easy denition and parameterization and easy to get related data. (3) Data is quantitative, so as to be the input of error forecasting model.

The reductive prediction value can be gotten from the output of the neural network in reverse.

P 0:5 pn 1 pmax pmin pmin

To the separate input data, the standardization of the input parameter is as follows:

Pn p l=d

l-Probability of the state, d2 p 1 p.

And then the input parameter such as season, the prediction values of the ART model, climate, holiday, sales promotion, area and price can be formatted. Next, the error values that are the sales quantity and prots of prediction results of ART model are taken as the outputs. Then, the model is learned by the neural network through large historic data. The amount of the hidden nodes in the neural network is 4 sqrt(m n). m: the output nerve cell, n: the input nerve cell. When the real-time parameters are input into the neural network, the outputs are gotten. Then, the outputs can be reverted by the formula (3).The nal prediction results are gotten when the error outputs are added by the outputs from the ART model. 5. Stage 1: the long-term sales forecasting base on the history data Based on the above adjustment improving model a long-term sales forecasting is able to be performed. First, ART main model

Table 1 The value of the month. Month Property 1 1.00 2 0.81 3 0.46 4 0.66 5 0.61 6 0.56 7 0.52 8 0.44 9 0.63 10 0.86 11 0.95 12 1.02

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is used which holds the historical data of fashion retail as the inputs, and the forecasting data as the outputs. Then the error forecasting model is used which takes the month, forecasting data of the ART model, climate, holiday, promotion, region and price, etc. as the input parameters, and the forecasting errors as the outputs to correct the forecasting data of the ART main model. Among this, the input property of error model input parameters is standardized as follows.  Month: The total is 12 discrete values, determine the important level of each month as per low and peak season, represent by the month factor. For the fashion retail, January, February, October, November and December are the peak sale season, and other months are the low season. And the sales may differ on the different months of low and peak season. Table 1 is the month factor that calculated according to the relative value of each months average sales in ve years from 2004 to 2008, which will be regarded as the input of neural network.  ART model forecasting value: continuous value standardize as per formula (2)  Season: one year has four seasons such as spring, summer, autumn and winter, standardize as per formula (4). Among this, p = 0, 1/3, 2/3, 1, l is 1/4, so pn equals to 0.58, 0.20, 0.96, 1.73, respectively.  Climate: basic weather element includes air pressure, air temperature, relative humidity, vapor pressure, total cloud cover, low clouds, visibility, wind direction and wind speed, rainfall and so on. The simplest method is regarded the average temperature of each month as the continuous variables and standardize it. But the temperature of some months may have dramatic changes, and it cannot be simply summarized by the average temperature. To reect the basic characteristic of the climate, this article extends the monthly average temperature to four continuous values as max monthly average temperature, min monthly average temperature, monthly average temperature, monthly raining days as per formula (2), standardize it and use it as the input of neural network.  Holiday: refer to the newest regulation of National Holiday Committee, and standardize the holidays in one month as per the formula (2) and use it as the input of neural network.

 Promotion: there are different patterns of promotion, such as advertisement, coupons, membership, kickbacks, part of the rebate, bundled sales, gifts, discounts and a variety of concessions, and it is difcult to make overall evaluation for the promotion effects, but it can be reected indirectly by the average discount rate. Continuous value will be standardized as per formula (2).  Region: according to the experience and importance level (economically developed city), the location city of stores can be divided into three kinds: A(Municipalities), B(capital of the province), C(others), and the points are 0, 1/2 and 1, respectively. As per the formula (4), it will be standardized to 0.71, 0.35 and 1.41.  Price: rst, use the monthly average price that represents the price factor. Continuous value as per the formula (2) to standardize, second, select the forecasting result (sales quantity and prot) error of ART model as the output of error forecasting model, use BP network to perform training, get the result and recover as per formula (3). Use an apparel company as an example describing the realization of long-term forecasting model. Use the data from January 2005 to December 2006 of this company as a training group to establish a traditional ART model and forecast the sales status from January 2007 to May 2008. The next step is to select the forecasting result error of the above ART model (intercept the data from January 2007 to December 2007) as training group and establish adjustment improving model, based on this to forecast the sales status from January 2008 to May 2008. Get the average sales value from January 2008 to May 2008 as the forecasting result of two models. Refer to Fig. 3 for the comparison as per percentage: Conclusion: excluding the inuence of some discrete points, the forecasting precision of adjustment improving model is increased 17% than that of the traditional ART model.

6. Stage 2: the short-term sales forecasting importing on the real-time data The improved adjustment model is the long-term prediction model. The lack of real-time reaction because of the distributed, distortion, arrearage information in the fashion retail network

Fig. 3. Precision comparison between original ART model & improved adjustment model.

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Fig. 4. Architecture of mobile distribution management system based on SOA.

leads to the warp of the decision-making. A dynamic forecasting model is put proposed. This technology collects, exchanges and displays the real-time distribution data rapidly using mobile terminals. Aiming at the characters of short-term clothing sales forecasting, real-time data are introduced to the improved adjustment forecasting model. So a multi-stage dynamic forecasting model is built, it comprehensively improve the accuracy and rapidity of clothing sales forecasting. 6.1. Collects & exchange & display the real-time distribution of mobile terminals A distribution management information system based on mobile terminal such as PDA was developed to solve the problem of information lag and distortion and the phenomenon of information island in distribution management. But there are two situations as follows. (1) There is a lack of information system in the enterprise. Then, a new system based on B/S architecture will be built. The data exchange can be handled through remote database. (2) There are legacy systems in the enterprise. Some of them are based on C/S architecture, and some are based on B/S architecture. Then, the data exchange cannot be easily operated among the systems. According to these situations, an information system based on SOA (Service-Oriented Architecture) is built to support the integration of the legacy systems. Web service is taken as the implementation of SOA. The system is divided into three layers: browser, application server and data server (Fig. 4). The mobile terminal is used to collect and display information. To exchange heterogeneous data, uniform XML standard format semantic vocabulary is built by uniform XML standard format to guarantee consistency between the legacy systems and the new system. To develop adaptive page, dynamic CSS and mobile programming specication sets must be adopted.

An application system was developed to demonstrate the feasibility of the system. The development software environment of the dynamic and accuracy sales forecasting system includes Windows XP, Microsoft SQL Server 2005, Visual Studio 2005, IIS 5.1. The hardware includes wireless network, socket scanner and mobile terminal such as Dopod 818 PocketPC, HP iPAQ H4150 PDA, NOKIA 7610 Smartphone. The verication is implemented in the real fashion retailing. Fig. 5 shows the tag being scanned by the PDA and the PDA interface of the sale information and prediction results. 6.2. Implementation of the short-term sales forecasting Even the adjustment improving model can only be used for longterm forecasting, it has obvious advantages. To keep this advantage, this article borrowed the thinking of adjustment improving model, introduced real-time data to improve error forecasting model and get the target of short-term dynamic forecasting. One outstanding feature of the real-time sales curve is not only following the long-term basic sales trend but also creating deformation disturbance continuously caused by different factors. For the sales inuence factors that created real-time disturbance, the selection principle is that the factors must have a signicant impact to short-term sales, fast change in short-term factors such as daily temperature, raining, holiday, daily average discount rate, which have a great impact to the fashion retail. It should be regarded as the input parameter of improved error forecasting model. The target of establishing short-term forecasting model is to perform daily sales forecasting in one week and use one week as a period and update the model dynamically and periodically. Similar to long-term forecasting model, set the intended forecasting week as the start point, the data of former two months as the sample, the data of rst month as training group to establish ART model, the data of the second month as verication group to verify the forecasting result of ART model and get the forecasting error; nally, use these errors as sample data to establish error forecasting model.

Fig. 5. Diagram of forecasting result of the No.1 store.

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The following is a sales forecasting example description for one week after 2009-1-3. First of all, establish ART forecasting model as per sample data from 2008-11-3 to 2008-12-3, perform sales forecasting from 2008-12-4 to 2009-1-3, and get the forecasting error, then show modeling to the forecasting error, nally, establish dynamic adjustment improving model, which is able to forecasting the sales of one week after 2009-1-3. From then on, update the model twice a week, then, the time widow of data sample from 2009-1-10 should be moved one week backward accordingly, and remodeling, so as to forecast the sales for the next week after 2009-1-10. Use the above two-stage dynamic sales forecasting model to forecast the sales prot and quantity from 2008-5-1 to 2008-5-7, use No. 1 stores as an example, the forecasting result as following drawing. Experiments show that the model reaching a very high precision for the forecasting of sales data, use No. 1 store as an example, the forecast results RRSE of sales prot and quantity are 0.356851537 and 1.035758268, respectively. This high precision forecasting result has a high reference value to the fashion retail short-term decision support. 7. Conclusion To improve the accuracy of fashion retail forecasting, a twostage dynamic forecasting model is built, which is combined with long-term and short-term prediction. The works are as follows. (1) Establish ART nonlinear forecasting model and perform a primary improvement to the traditional forecasting method. (2) For the forecasting error of ART model, use neural network method to establish multi-variable error forecasting model. This model introduced the concept of inuence factors and divided the impact factors into two stages (long term and short term), analyzed the reason creating the sales forecasting errors and has a quantitative research to the main factors, introduced the input space of neural network, established error forecasting model that more suitable for the fashion retail. (3) Combined the ART model and error forecasting model based on neural network, established adjustment improving model applying for the fashion retail forecasting. Then, a dynamic short-term forecasting model is put proposed. The real-time distribution data is rapidly collected, exchanged and displayed by using mobile terminals; experiments veried that this model promotes greatly the accuracy of forecasting results. Because of the inuences of the nature factors and human factors in the fashion industry, the sales prediction modeling is quite complex. So there are many things to be done in this area which are as follows.  The improved adjustment forecasting model which would import further factors will much more accord with the actual situation of the fashion retail.  The complex inuences factors such as social factor and human factor will be further studied by the AHP (analytic hierarchy process), importance analysis, quantity analysis, etc.  The new fruits in the data milling area can be used in the improved adjustment forecasting model comparing with the ANN (Articial Neural Networks).

Acknowledgment The research reported here is partially supported by National Key Technology R&D Program 2006BAF01A42 of China. References
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