¹Lancaster University Management School, Lancaster, UK

Correspondence: RH Teunter, Department of Management Science, Lancaster University Management School, Lancaster, Lancashire LA1 4YX, UK. E-mail: r.teunter@lancaster.ac.uk

Received March 2007; Accepted November 2007; Published online 6 February 2008.

Abstract

Methods for forecasting intermittent demand are compared using a large data set from the UK Royal Air Force. Several important results are found. First, we show that the traditional per period forecast error measures are not appropriate for intermittent demand, even though they are consistently used in the literature. Second, by comparing the ability to approximate target service levels and stock holding implications, we show that Croston's method (and a variant) and Bootstrapping clearly outperform Moving Average and Single Exponential Smoothing. Third, we show that the performance of Croston and Bootstrapping can be significantly improved by taking into account that an order in a period is triggered by a demand in that period.