Forecasting Intermittent Demand by Hyperbolic-Exponential Smoothing
Publication Type:
Refereed Original Article
Abstract:
Croston's method is generally viewed as superior to exponential
smoothing when demand is intermittent, but it has the drawbacks of
bias and an inability to deal with obsolescence, in which an item's
demand ceases altogether. Several variants have been reported, some
of which are unbiased on certain types of demand, but only one recent
variant addresses the problem of obsolescence. We describe a new
hybrid of Croston's method and Bayesian inference called
Hyperbolic-Exponential Smoothing, which is unbiased on
non-intermittent and stochastic intermittent demand, decays
hyperbolically when obsolescence occurs, and performs well in
experiments.
Digital Object Identifer (DOI):
10.1016/j.ijforecast.2014.01.006
Publication Status:
Published
Date Accepted for Publication:
Tuesday, 15 April, 2014
Publication Date:
20/07/2014
Journal:
International Journal of Forecasting
Research Group:
Institution:
National University of Ireland, Cork (UCC)
Open access repository:
Yes