Journal of Management and Informatics
Vol. 4 No. 1 (2025): April Season | JMI: Journal of Management and Informatics

Measuring the forecast accuracy in retail MSMEs: A comparative analysis between AI and traditional methods in the era of digital selling

Hikmah, Nur (Unknown)
Fauzi, Achmad (Unknown)
Nayyiroh, Frida Ulfatun (Unknown)



Article Info

Publish Date
26 Apr 2025

Abstract

Accurate sales forecasting is essential for retail Micro, Small, and Medium Enterprises (MSMEs) to optimize operations and inventory planning in the digital economy. This study compares the forecasting accuracy between Artificial Intelligence (AI)-based methods (Random Forest, Decision Tree) and traditional techniques (Moving Average, Exponential Smoothing) using 3,600 transaction records from five retail MSMEs over three months. A quantitative experimental approach was employed to evaluate model performance under real-world conditions, including market fluctuations and seasonal anomalies. Evaluation metrics include Mean Absolute Percentage Error (MAPE), Root Mean Squared Error (RMSE), and cross-validation techniques. The findings indicate that the Random Forest model achieves superior accuracy (MAPE = 8.5%) compared to traditional methods (MAPE = 15.2%). Explainable AI (XAI) using SHAP and LIME further enhances transparency and managerial trust. Although traditional methods offer faster computation and ease of interpretation, AI-based models show resilience against unpredictable sales patterns. This research recommends hybrid adoption strategies that balance predictive power with interpretability for MSMEs with limited technical capacity. The results contribute to the discourse on digital transformation and intelligent forecasting in the MSME sectors.

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Journal Info

Abbrev

jmi

Publisher

Subject

Computer Science & IT Decision Sciences, Operations Research & Management

Description

management and business economics involving operational management, management of human resources, finance management, marketing management, social and economic ...