How deeply does Demand Forecasting Best Practices cover local model?

Defines independent fitting and explains its data boundary, but stops before implementation details.

Local model

As explained in Demand Forecasting Best Practices

A local model is a forecasting model fitted independently to the historical data of one product or other individual series.

When forecasting demand, a local model answers a narrow question: what can this product’s own history tell us about its future? section 15.1.1

A local model is fitted independently to each product or individual series. Forecasting product A therefore uses product A’s historical data alone, without learning from other products. section 15.1.1

This creates a clear trade-off:

More history for the same product can improve the model’s ability to assess patterns such as monthly seasonality. section 15.1.1
Adding other products does not transfer their learned insights to the local model. section 15.1.1

Product A and product B

A local model forecasting product A examines product A’s past demand. A global model instead learns from all products, potentially recognizing relationships such as promotions increasing demand. section 15.1.1

How Demand Forecasting Best Practices covers it

Cover of Demand Forecasting Best Practices

liveBook manning.com

Read Demand Forecasting Best Practices on liveBook Get the book at manning.com

Related concepts

global modelcontrasts with · A global model is a forecasting model trained on data from an entire collection of products or series to learn patterns shared across them.
statistical modelingkind of · Statistical modeling is the use of mathematical or probabilistic models to represent patterns, relationships, or variability in data for description, inference, or prediction.

This explainer was generated by Manning's knowledge graph from the text of Demand Forecasting Best Practices. The section links point to the parts of the book it draws on.