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.
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Acknowledgements
This paper is based on a project sponsored by Logistics Analysis and Research Organisation (LARO), a sub-department of the Defence Logistics Organisation (DLO), based in Wyton, UK. In particular, we thank David Hampton, Robert Woolford and Anne Metcalfe for their help and support. We thank the anonymous referees for their many useful comments.
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Teunter, R., Duncan, L. Forecasting intermittent demand: a comparative study. J Oper Res Soc 60, 321–329 (2009). https://doi.org/10.1057/palgrave.jors.2602569
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DOI: https://doi.org/10.1057/palgrave.jors.2602569