Question 150 - MLS-C01 discussion

The company wants to predict the demand for a new product that will soon be launched, based on the sales history of similar products. This is a time series forecasting problem, which requires a machine learning algorithm that can learn from historical data and generate future predictions.

One of the most suitable solutions for this problem is to use the Amazon SageMaker DeepAR algorithm, which is a supervised learning algorithm for forecasting scalar time series using recurrent neural networks (RNN). DeepAR can handle multiple related time series, such as the sales of different products, and learn a global model that captures the common patterns and trends across the time series. DeepAR can also generate probabilistic forecasts that provide confidence intervals and quantify the uncertainty of the predictions.

DeepAR can outperform traditional forecasting methods, such as ARIMA, especially when the dataset contains hundreds or thousands of related time series. DeepAR can also use the trained model to forecast the demand for new products that are similar to the ones it has been trained on, by using the categorical features that encode the product attributes. For example, the company can use the product type, brand, flavor, size, and price as categorical features to group the products and learn the typical behavior for each group.

Therefore, the Machine Learning Specialist should apply the Amazon SageMaker DeepAR algorithm to forecast the demand for the new product, by using the sales history of the existing products as the training dataset, and the product attributes as the categorical features.

References:

DeepAR Forecasting Algorithm - Amazon SageMaker

Now available in Amazon SageMaker: DeepAR algorithm for more accurate time series forecasting