Date of this Version
We conducted a modeling exercise in conjunction with the online music retailer CDNOW to develop a simple stochastic model of buyer behavior capable of forecasting medium-term aggregate CD purchasing by a cohort of new customers. We modeled weekly sales using a finite mixture of beta-geometric distributions with a separate time-varying component to capture nonstationarity in repeat buying. The resulting model can easily be implemented within a standard spreadsheet environment (for example, Microsoft Excel). It does a good job of describing the underlying sales patterns and produces an excellent medium-term forecast.
Originally published in Interfaces © 2001 INFORMS
This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/inte.31.3s.94.9683
marketing-buyer behavior, forecasting-applications
Fader, P. S., & Hardie, B. G. (2001). Forecasting Repeat Sales at CDNOW: A Case Study. Interfaces, 31 (3 Supplement), S94-S107. http://dx.doi.org/10.1287/inte.31.3s.94.9683
Date Posted: 15 June 2018
This document has been peer reviewed.