Journal
JOURNAL OF FORECASTING
Volume 24, Issue 6, Pages 389-402Publisher
WILEY
DOI: 10.1002/for.963
Keywords
Croston's method; exponential smoothing; forecasting; intermittent demand; prediction intervals
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Croston's method is widely used to predict inventory demand when it is intermittent. However, it is an ad hoc method with no properly formulated underlying stochastic model. In this paper, we explore possible models underlying Croston's method and three related methods, and we show that any underlying model will be inconsistent with the properties of intermittent demand data. However, we find that the point forecasts and prediction intervals based on such underlying models may still be useful. Copyright (c) 2005 John Wiley & Sons, Ltd.
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