Training Process

Overview

The SGIVU ML training pipeline transforms raw transaction data into accurate demand forecasting models. The process involves feature engineering, model training with multiple algorithms, evaluation, and versioning.

Pipeline Architecture

Feature Engineering

The feature engineering pipeline is implemented in app/infrastructure/ml/feature_engineering.py and transforms raw transaction data into ML-ready features.

Input Data Requirements

Raw transaction data must include:

vehicle_id

string

required

Unique identifier for tracking vehicle lifecycle

vehicle_type

string

required

Vehicle category (CAR, MOTORCYCLE)

brand

string

required

Vehicle manufacturer

model

string

required

Vehicle model name

line

string

required

Specific trim/version - cannot be empty

contract_type

string

required

Transaction type: SALE or PURCHASE

sale_price

float

Sale transaction price

purchase_price

float

Purchase transaction price

created_at

datetime

required

Record creation timestamp

updated_at

datetime

Record update timestamp

Data Normalization

Before feature engineering, all categorical data is normalized:

from app.infrastructure.ml.normalization import (
    canonicalize_label,
    canonicalize_brand_model
)

# Label normalization
vehicle_type = canonicalize_label("car")  # → "CAR"
line = canonicalize_label(" xei 2.0 ")    # → "XEI 2.0"

# Brand/model canonicalization
brand, model = canonicalize_brand_model("toyota", "corolla")
# → ("TOYOTA", "COROLLA")

Normalization ensures consistent segmentation by handling case variations, typos, and whitespace differences.

Feature Categories

The pipeline generates three types of features:

1. Categorical Features

Segmentation dimensions that identify the vehicle:

category_cols = [
    "vehicle_type",  # CAR, MOTORCYCLE
    "brand",         # TOYOTA, HONDA, FORD, etc.
    "model",         # COROLLA, CIVIC, F-150, etc.
    "line"           # Trim/version (mandatory)
]

These are encoded using OneHotEncoder during model training.

2. Business Metrics

Aggregated monthly metrics per segment:

# app/infrastructure/ml/feature_engineering.py:105-117

monthly = (
    work_df.groupby(group_cols)
    .agg(
        sales_count=("is_sale", "sum"),              # Target variable
        purchases_count=("is_purchase", "sum"),      # Inventory additions
        avg_sale_price=("sale_price", "mean"),       # Average sale price
        avg_purchase_price=("purchase_price", "mean"),# Average cost
        avg_margin=("margin", "mean"),                # Profit margin
        avg_days_inventory=("days_in_inventory", "mean") # Time to sell
    )
    .reset_index()
)

# Inventory rotation: sales / purchases
monthly["inventory_rotation"] = monthly["sales_count"] / monthly[
    "purchases_count"
].clip(lower=1)

Business Feature Descriptions:

Feature	Description	Business Insight
`purchases_count`	New inventory acquisitions per month	Supply side activity
`avg_margin`	Average profit per sale	Profitability indicator
`avg_sale_price`	Mean selling price	Price point trends
`avg_purchase_price`	Mean acquisition cost	Cost trends
`avg_days_inventory`	Average days from purchase to sale	Inventory velocity
`inventory_rotation`	Sales-to-purchase ratio	Turnover efficiency

3. Time-Series Features

Lagged values and rolling statistics capture temporal patterns:

# app/infrastructure/ml/feature_engineering.py:197-209

def _add_lags(self, group: pd.DataFrame) -> pd.DataFrame:
    """Agrega columnas de lag y medias móviles al grupo."""
    group = group.sort_values("event_month")
    group["lag_1"] = group["sales_count"].shift(1)   # Last month
    group["lag_3"] = group["sales_count"].shift(3)   # 3 months ago
    group["lag_6"] = group["sales_count"].shift(6)   # 6 months ago
    
    # Rolling averages
    group["rolling_mean_3"] = (
        group["sales_count"].rolling(window=3, min_periods=1).mean().shift(1)
    )
    group["rolling_mean_6"] = (
        group["sales_count"].rolling(window=6, min_periods=1).mean().shift(1)
    )
    return group

Time-Series Feature Descriptions:

Feature	Window	Purpose
`lag_1`	1 month	Recent trend signal
`lag_3`	3 months	Quarterly pattern
`lag_6`	6 months	Semi-annual seasonality
`rolling_mean_3`	3-month average	Short-term smoothing
`rolling_mean_6`	6-month average	Long-term trend

Lags are calculated per segment to avoid leakage across different vehicle types/brands/models.

4. Temporal Features

Cyclical encoding captures seasonality:

# app/infrastructure/ml/feature_engineering.py:211-217

def _add_time_features(self, df: pd.DataFrame) -> pd.DataFrame:
    """Agrega features temporales (mes, año, representación cíclica)."""
    df["month"] = pd.DatetimeIndex(df["event_month"]).month
    df["year"] = pd.DatetimeIndex(df["event_month"]).year
    
    # Cyclical encoding for seasonality
    df["month_sin"] = np.sin(2 * np.pi * df["month"] / 12)
    df["month_cos"] = np.cos(2 * np.pi * df["month"] / 12)
    return df

Why Cyclical Encoding?

Using sin and cos ensures that December (12) and January (1) are recognized as adjacent months, capturing year-end seasonality patterns.

Feature Engineering Output

The build_feature_table method produces a monthly aggregated dataset:

# Example output structure

   vehicle_type    brand     model      line  event_month  sales_count  purchases_count  ...
0           CAR  TOYOTA   COROLLA  XEI 2.0   2025-01-01         42.0             38.0  ...
1           CAR  TOYOTA   COROLLA  XEI 2.0   2025-02-01         38.0             35.0  ...
2           CAR  TOYOTA   COROLLA  XEI 2.0   2025-03-01         44.0             40.0  ...

This table contains one row per segment per month with all engineered features.

Model Training

The training process is orchestrated by the TrainingService (app/application/services/training_service.py:46-94).

Training Workflow

# Simplified training flow

async def train(self, raw_df: pd.DataFrame) -> ModelMetadata:
    # 1. Feature engineering
    dataset = self._feature_engineering.build_feature_table(raw_df)
    
    # 2. Validate dataset
    if dataset.empty:
        raise TrainingError("No hay datos históricos para entrenar.")
    
    # 3. Train and evaluate models
    evaluation = await asyncio.to_thread(
        self._model_trainer.train_and_evaluate,
        dataset,
        self._feature_engineering.category_cols,
        self._feature_engineering.optional_category_cols,
        self._feature_engineering.numeric_cols,
    )
    
    # 4. Save best model and metadata
    metadata_dict = {
        "trained_at": datetime.now(timezone.utc).isoformat(),
        "target": self._settings.target_column,
        "features": [...],
        "metrics": evaluation.metrics,
        "candidates": evaluation.candidates,
        "train_samples": evaluation.train_samples,
        "test_samples": evaluation.test_samples,
        "total_samples": len(dataset),
    }
    
    saved = await self._registry.save(evaluation.pipeline, metadata_dict)
    return saved

Train/Test Split

The split respects temporal ordering to prevent data leakage:

# app/infrastructure/ml/model_training.py:147-164

def _split_by_time(self, df: pd.DataFrame) -> tuple[pd.DataFrame, pd.DataFrame]:
    """Divide en train/test respetando el orden temporal del historial."""
    unique_months = sorted(df["event_month"].unique())
    
    # Require minimum history (default: 6 months)
    if len(unique_months) < self._settings.min_history_months:
        raise ValueError(
            f"Se requieren al menos {self._settings.min_history_months} meses "
            f"para entrenar."
        )
    
    # 80/20 split by time
    cutoff_index = int(len(unique_months) * 0.8)
    cutoff_date = unique_months[max(1, cutoff_index - 1)]
    
    train = df[df["event_month"] <= cutoff_date]
    test = df[df["event_month"] > cutoff_date]
    
    return train, test

Example: With 12 months of data:

Training set: First 9-10 months
Test set: Last 2-3 months

This simulates real forecasting where you predict future months based on historical data.

Preprocessing Pipeline

Before model fitting, data passes through sklearn preprocessing:

# app/infrastructure/ml/model_training.py:166-186

@staticmethod
def _build_preprocessor(
    category_cols: list[str],
    optional_cols: list[str],
    numeric_cols: list[str],
) -> ColumnTransformer:
    """Construye el ColumnTransformer con encoding categórico y escalado numérico."""
    
    # One-hot encoding for categories
    categorical = OneHotEncoder(handle_unknown="ignore")
    
    # Imputation + standardization for numerics
    numeric = Pipeline(
        steps=[
            ("imputer", SimpleImputer(strategy="median")),
            ("scaler", StandardScaler()),
        ]
    )
    
    return ColumnTransformer(
        transformers=[
            ("categorical", categorical, category_cols + optional_cols),
            ("numeric", numeric, numeric_cols),
        ],
        remainder="drop",
    )

Preprocessing Steps:

Categorical variables: One-hot encoded (creates binary columns per category)
Numeric variables:
- Missing values imputed with median
- Standardized to zero mean and unit variance

Model Candidates

Three algorithms are evaluated:

Linear Regression
Random Forest
XGBoost

LinearRegression()

Pros:

Fast training and prediction
Interpretable coefficients
Good baseline performance

Cons:

Assumes linear relationships
Limited expressiveness for complex patterns

RandomForestRegressor(
    n_estimators=300,
    max_depth=15,
    random_state=7
)

Pros:

Handles non-linear relationships
Robust to outliers
Feature importance insights

Cons:

Slower than linear models
Can overfit with shallow trees

XGBRegressor(
    n_estimators=500,
    max_depth=6,
    learning_rate=0.05,
    subsample=0.9,
    colsample_bytree=0.9,
    objective="reg:squarederror",
    random_state=7
)

Pros:

State-of-the-art performance
Handles complex interactions
Regularization prevents overfitting

Cons:

Requires more tuning
Longer training time
Less interpretable

Model Evaluation

All candidates are evaluated on the test set:

# app/infrastructure/ml/model_training.py:96-128

for name, estimator in candidates_list:
    pipeline = Pipeline(
        steps=[("preprocess", preprocessor), ("model", estimator)],
        memory=None,
    )
    pipeline.fit(x_train, y_train)
    preds = np.asarray(pipeline.predict(x_test))
    
    # Calculate metrics
    rmse = np.sqrt(mean_squared_error(y_test, preds))
    mae = mean_absolute_error(y_test, preds)
    mape = mean_absolute_percentage_error(y_test, preds)
    r2 = r2_score(y_test, preds)
    
    evaluated.append({
        "model": name,
        "rmse": rmse,
        "mae": mae,
        "mape": mape,
        "r2": r2,
        "samples": len(y_test)
    })
    
    # Track best model by RMSE
    if rmse < best_rmse:
        best_rmse = rmse
        best_model = pipeline
        best_metrics = {"rmse": rmse, "mae": mae, "mape": mape, "r2": r2}

Evaluation Metrics:

RMSE (Root Mean Squared Error)

Penalizes large errors more heavily. Same units as target variable.

RMSE = √(Σ(predicted - actual)² / n)

Lower is better. Primary metric for model selection.

MAE (Mean Absolute Error)

Average absolute difference between predictions and actuals.

MAE = Σ|predicted - actual| / n

Lower is better. More interpretable than RMSE.

MAPE (Mean Absolute Percentage Error)

Percentage error, scale-independent.

MAPE = Σ|predicted - actual| / |actual| / n

Lower is better. Example: 0.087 = 8.7% average error.

R² (Coefficient of Determination)

Proportion of variance explained by the model.

R² = 1 - (SS_residual / SS_total)

Closer to 1.0 is better. 0.89 = model explains 89% of variance.

Residual Std Dev

Standard deviation of prediction errors. Used for confidence intervals.

residuals = y_test - predictions
residual_std = np.std(residuals)

Used to calculate upper/lower bounds in predictions.

Model Selection and Refit

After evaluation, the best model is retrained on the full dataset:

# app/infrastructure/ml/model_training.py:130-144

# Select best model by RMSE
assert best_model is not None

# Refit on complete dataset for production use
final_model = best_model.fit(dataset[feature_cols], dataset["sales_count"])

# Calculate residual statistics for confidence intervals
residuals = y_test - best_predictions if best_predictions is not None else []
residual_std = float(np.std(residuals)) if len(residuals) else 1.0

return TrainingEvaluation(
    pipeline=final_model,
    metrics=best_metrics,
    residual_std=residual_std,
    candidates=evaluated,
    train_samples=len(train_df),
    test_samples=len(test_df),
)

Refitting on the full dataset gives the model access to all available information for production predictions.

Prediction Generation

Once trained, the model generates multi-horizon forecasts iteratively.

Iterative Forecasting

The _forecast method in PredictionService (app/application/services/prediction_service.py:266-307):

def _forecast(
    self,
    model: Any,
    metadata: ModelMetadata,
    history: pd.DataFrame,
    horizon: int,
    confidence: float,
) -> List[Dict[str, Any]]:
    """Genera pronóstico iterativo mes a mes usando el modelo entrenado."""
    residual_std = (metadata.metrics or {}).get("residual_std", 1.0)
    z_value = self._z_value(confidence)  # Z-score for confidence level
    
    working_history = history.copy()
    target_month = working_history["event_month"].max()
    results = []
    
    for _ in range(horizon):
        # 1. Advance to next month
        target_month = target_month + pd.offsets.MonthBegin(1)
        
        # 2. Build feature row for next month
        future_row = fe.build_future_row(working_history, target_month)
        features = future_row[fe.category_cols + fe.numeric_cols]
        
        # 3. Predict demand
        prediction = float(model.predict(features)[0])
        
        # 4. Calculate confidence intervals
        lower = max(0.0, prediction - z_value * residual_std)
        upper = max(lower, prediction + z_value * residual_std)
        
        results.append({
            "month": target_month.date().isoformat(),
            "demand": prediction,
            "lower_ci": lower,
            "upper_ci": upper,
        })
        
        # 5. Append prediction to history for next iteration
        appended = future_row.copy()
        appended["sales_count"] = prediction
        working_history = pd.concat([working_history, appended], ignore_index=True)
    
    return results

Future Feature Construction

The build_future_row method creates features for months beyond the training data:

# app/infrastructure/ml/feature_engineering.py:142-195

def build_future_row(
    self, history: pd.DataFrame, target_month: pd.Timestamp
) -> pd.DataFrame:
    """Construye una fila de features para un mes futuro basándose en el historial."""
    
    history = history.sort_values("event_month")
    recent = history.tail(3)  # Last 3 months
    
    # Use recent averages for business metrics
    template = {
        "event_month": target_month,
        "purchases_count": float(recent["purchases_count"].mean()),
        "avg_margin": float(recent["avg_margin"].mean()),
        "avg_sale_price": float(recent["avg_sale_price"].mean()),
        "avg_purchase_price": float(recent["avg_purchase_price"].mean()),
        "avg_days_inventory": float(recent["avg_days_inventory"].mean()),
        "inventory_rotation": float(recent["inventory_rotation"].mean()),
        "sales_count": float(history["sales_count"].iloc[-1]),  # Last month
    }
    
    # Carry forward categorical values
    for col in self.category_cols:
        template[col] = history[col].iloc[-1]
    
    # Append to history and recalculate lags
    future_history = pd.concat([history, pd.DataFrame([template])], ignore_index=True)
    future_history = self._add_lags(future_history)  # Recalculate lag features
    future_history = self._add_time_features(future_history)  # Add temporal features
    
    # Extract the future row
    future_row = future_history[future_history["event_month"] == target_month].tail(1)
    return future_row

Key Insight: Future predictions use recent historical averages for business metrics (prices, margins) and automatically update lag features as new predictions are made.

Confidence Intervals

Confidence bounds are calculated using normal distribution assumptions:

# app/application/services/prediction_service.py:309-321

@staticmethod
def _z_value(confidence: float) -> float:
    """Valor z para un nivel de confianza dado (lookup simplificado)."""
    conf = min(max(confidence, 0.5), 0.99)
    if conf >= 0.99:
        return 2.58
    if conf >= 0.95:
        return 1.96
    if conf >= 0.90:
        return 1.64
    if conf >= 0.80:
        return 1.28
    return 1.0

Z-score Mapping:

Confidence Level	Z-score	Interpretation
80%	1.28	±1.28σ contains 80% of values
90%	1.64	±1.64σ contains 90% of values
95%	1.96	±1.96σ contains 95% of values
99%	2.58	±2.58σ contains 99% of values

Interval Calculation:

lower_ci = max(0, prediction - z * residual_std)
upper_ci = prediction + z * residual_std

The max(0, ...) ensures demand predictions never go negative.

Training via API

Triggering Retraining

Retraining can be triggered programmatically:

curl -X POST https://api.sgivu.com/v1/ml/retrain \
  -H "Authorization: Bearer YOUR_TOKEN" \
  -H "Content-Type: application/json" \
  -d '{
    "start_date": "2024-01-01",
    "end_date": "2026-03-06"
  }'

Automated Retraining

For production environments, consider scheduled retraining:

# Example: Kubernetes CronJob
apiVersion: batch/v1
kind: CronJob
metadata:
  name: ml-retrain-monthly
spec:
  schedule: "0 2 1 * *"  # 2 AM on the 1st of each month
  jobTemplate:
    spec:
      template:
        spec:
          containers:
          - name: retrain
            image: sgivu-ml-client:latest
            command:
            - python
            - scripts/retrain.py
            env:
            - name: ML_SERVICE_URL
              value: "http://sgivu-ml:8000"
            - name: INTERNAL_SERVICE_KEY
              valueFrom:
                secretKeyRef:
                  name: sgivu-secrets
                  key: internal-service-key
          restartPolicy: OnFailure

Best Practices

Data Quality

Ensure Complete Line Information

All transactions must have non-empty line field. This is mandatory for segmentation.

Minimum History Requirements

At least 6 months of data per segment (configurable via MIN_HISTORY_MONTHS). More is better for capturing seasonality.

Consistent Naming

Use consistent brand/model/line naming. The normalization pipeline handles some variations, but major inconsistencies should be cleaned upstream.

Training Frequency

Retrain models regularly to adapt to changing demand patterns:

Monthly: For stable businesses
Weekly: For fast-changing markets
On-demand: After major business events

Model Monitoring

Track these indicators for model health:

Metric degradation: Is RMSE increasing over time?
Prediction accuracy: Compare predictions to actuals from previous months
Coverage: Are new vehicle segments being added that lack training data?
Residual patterns: Are errors systematic or random?

Feature Engineering Customization

Extend features for your specific use case:

# Example: Add custom features

class CustomFeatureEngineering(FeatureEngineering):
    def __init__(self, settings: Settings):
        super().__init__(settings)
        # Add custom numeric features
        self.numeric_cols.extend([
            "marketing_spend",      # External factor
            "competitor_price",     # Market dynamics
            "economic_indicator"    # Macroeconomic signal
        ])

Troubleshooting

Training fails with 'line' missing error

Error: ValueError: La columna 'line' es obligatoria para entrenar el modelo.Cause: Input data is missing the line column or has empty values.Solution:

Ensure all transactions include line field
Backfill historical data with line information
Use a default value (e.g., “STANDARD”) for records without specific trim info

Insufficient history error

Error: ValueError: Se requieren al menos 6 meses para entrenar.Cause: Not enough historical months in dataset.Solution:

Adjust MIN_HISTORY_MONTHS setting (not recommended below 3)
Wait for more data to accumulate
Use synthetic/demo data for testing

Poor model performance (high RMSE)

Symptoms: RMSE > 10, MAPE > 0.30, R² < 0.50Possible causes:

Insufficient training data (< 12 months)
High variance in sales patterns
Missing important features
Data quality issues (outliers, errors)

Solutions:

Collect more historical data
Add external features (promotions, seasonality indicators)
Review data for anomalies
Consider segment-specific models for heterogeneous products

Training takes too long

Cause: Large dataset or complex models (XGBoost with many estimators)Solutions:

Reduce n_estimators in XGBoost/RandomForest
Sample data for faster iteration during development
Use more powerful compute resources
Consider incremental learning approaches

Next Steps

Model Management

Learn about versioning and model lifecycle

Prediction API

Use trained models for forecasting

ML Service Overview

Complete ML service architecture

Infrastructure

Deploy ML service to production

ML Service

​Overview

​Pipeline Architecture

​Feature Engineering

​Input Data Requirements

​Data Normalization

​Feature Categories

​1. Categorical Features

​2. Business Metrics

​3. Time-Series Features

​4. Temporal Features

​Feature Engineering Output

​Model Training

​Training Workflow

​Train/Test Split

​Preprocessing Pipeline

​Model Candidates

​Model Evaluation

​Model Selection and Refit

​Prediction Generation

​Iterative Forecasting

​Future Feature Construction

​Confidence Intervals

​Training via API

​Triggering Retraining

​Automated Retraining

​Best Practices

​Data Quality

Ensure Complete Line Information

Minimum History Requirements

Consistent Naming

​Training Frequency

​Model Monitoring

​Feature Engineering Customization

​Troubleshooting

​Next Steps

Model Management

Prediction API

ML Service Overview

Infrastructure

Overview

Pipeline Architecture

Feature Engineering

Input Data Requirements

Data Normalization

Feature Categories

1. Categorical Features

2. Business Metrics

3. Time-Series Features

4. Temporal Features

Feature Engineering Output

Model Training

Training Workflow

Train/Test Split

Preprocessing Pipeline

Model Candidates

Model Evaluation

Model Selection and Refit

Prediction Generation

Iterative Forecasting

Future Feature Construction

Confidence Intervals

Training via API

Triggering Retraining

Automated Retraining

Best Practices

Data Quality

Training Frequency

Model Monitoring

Feature Engineering Customization

Troubleshooting

Next Steps