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Amazon Forecast Proof of Concept

A Story of Owning Change

About Duty Free Americas

Duty Free Americas (DFA) is a leading travel retailer in the Western Hemisphere with more than 180 retail locations. A large portion of their retail footprint encompasses major airports in the United States, as well as numerous locations on the northern and southern borders with Canada and Mexico.

Duty Free Americas Logo

Working with 1Strategy was very helpful in measuring and validating our current systems and gave us confidence to move forward.

Josh Adler, DFA

Why Amazon Web Services

Amazon has been making use of Machine Learning for their retail business for well over a decade. When leveraging Amazon Forecast, businesses can tap into amassed ML experience and success of, and do so without the same investment in infrastructure, training, and talent.

The Challenge

Duty Free Americas has a process of calculating demand and forecasting inventory levels for inventory planning. While this process has worked, they were hoping to measure their current processes and mechanisms against other options and identify areas that may need improvement. They were also considering ways to potentially increase the accuracy of the forecasts and their ability to use them to adequately maintain inventory levels of some products.

The Benefits

Through the use of Amazon Forecast, Duty Free Americas would be able to increase forecast accuracy by leveraging Forecast’s DeepAR+ algorithm to validate their inventory planning forecast models. In addition, DFA would be able to improve forecasting accuracy through inference by combining the standard target time series dataset with a related time series dataset and an item metadata dataset.

Improved accuracy of inventory forecasting would save time and money by improving their ability to maintain adequate inventory on all products and reducing their losses associated with excess inventory, reduced sales prices, and shipping excess inventory between distribution centers and retail locations to move it.

The initial steps of the project involved 1Strategy working with DFA to build and test the Forecast service with the target time series dataset. With the initial target time series dataset, 1Strategy was able to test the training of a predictor and generation of a forecast. After the initial test run, 1Strategy worked with DFA to identify other metrics that could be included in the related time series, as well as important metadata related to products to be included in the item metadata dataset. After a second round of testing to train a new predictor using all three datasets, the entire process was automated and documented using a series of Jupyter notebooks, and the forecasting process was tested against historical data to get an idea of the forecast accuracy.

Duty Free Americas process

Through this project, Duty Free Americas was able to assess their current processes and identify areas that needed improvement. “Working with 1Strategy was very helpful in measuring and validating our current systems and gave us confidence to move forward. We are evaluating other ways we can expand our inventory management capabilities leveraging this technology,” said Josh Adler of DFA.

The work described in this engagement was originally completed by 1Strategy, a TEKsystems Global Services company acquired in 2019. As of June 2023, 1Strategy has fully integrated with TEKsystems Global Services to continue to deliver AWS expertise to customers. Learn more about our AWS solutions.

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