Add Conclusion section
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tex/5_con/3_implications.tex
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\subsection{Managerial Implications}
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\label{implications}
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Even though zeitgeist claims that having more data is always better, our study
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shows this is not the case here:
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First, under certain circumstances, accuracy may go up with shorter training
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horizons.
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Second, none of the external data sources improves the accuracies.
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Somewhat surprisingly, despite ML-based methods` popularity in both business
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and academia in recent years, we must conclude that classical forecasting
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methods suffice to reach the best accuracy in our study.
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There is one case where ML-based methods are competitive in our case study:
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In a high demand pixel, if only about four to six weeks of past data is
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available, the \textit{vrfr} model outperformed the classical ones.
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So, we recommend trying out ML-based methods in such scenarios.
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In addition, with the \textit{hsma} and \textit{hets} models being the overall
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winners, incorporating real-time data is not beneficial, in particular,
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with more than six weeks of training material available.
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Lastly, with just \textit{hets}, that exhibits an accuracy comparable to
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\textit{hsma} for low and medium demand, our industry partner can likely
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schedule its shifts on an hourly basis one week in advance.
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This study gives rise to the following managerial implications.
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First, UDPs can implement readily available forecasting algorithms with limited
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effort.
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This, however, requires purposeful data collection and preparation by those
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companies, which, according to our study, is at least equally important as
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the selection of the forecasting algorithm, as becomes clear from
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investigating the impact of the length of the training horizon.
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Second, the benefits of moving from manual forecasting to automated forecasting
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include being able to pursue a predictive routing strategy and
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demand-adjusted shift scheduling.
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At the time the case study data was collected, our industry partner did not
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conduct any forecasting; the only forecasting-related activities were the
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shift managers scheduling the shifts one week in advance manually in
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spreadsheets.
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Thus, selecting the right forecasting algorithm according to the framework
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proposed in this study becomes a prerequisite to the much needed
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operational improvements UDPs need to achieve in their quest for
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profitability.
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In general, many UDPs launched in recent years are venture capital backed
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start-up companies that almost by definition do not have a strong
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grounding in operational excellence, and publications such as the ones by
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Uber are the exception rather than the rule.
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Our paper shows that forecasting the next couple of hours can already be
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implemented within the first year of a UDP's operations.
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Even if such forecasts could not be exploited by predictive routing (e.g., due
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to prolonged waiting times at restaurants), they would help monitoring the
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operations for exceptional events.
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Additionally, the shift planning may be automated saving as much as one shift
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manager per city.
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We emphasize that for the most part, our proposed forecasting system
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is calibrated automatically and no manual work by a data scientist is required.
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The only two parameters where assumptions need to be made are the pixel size
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and the time step.
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While they can only be optimized by the data scientist over time, the results in our
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empirical study suggest that a pixel size of $1~\text{km}^2$ and a time step of
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one hour are ideal.
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