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Forecasting intermittent demand by hyperbolic-exponential smoothing

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  • Prestwich, S.D.
  • Tarim, S.A.
  • Rossi, R.
  • Hnich, B.

Abstract

Croston’s method is generally viewed as being superior to exponential smoothing when the demand is intermittent, but it has the drawbacks of bias and an inability to deal with obsolescence, where the demand for an item 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.

Suggested Citation

  • Prestwich, S.D. & Tarim, S.A. & Rossi, R. & Hnich, B., 2014. "Forecasting intermittent demand by hyperbolic-exponential smoothing," International Journal of Forecasting, Elsevier, vol. 30(4), pages 928-933.
    • Handle: RePEc:eee:intfor:v:30:y:2014:i:4:p:928-933
    DOI: 10.1016/j.ijforecast.2014.01.006
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    References listed on IDEAS

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    Cited by:

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    2. Mariusz Doszyn, 2020. "Accuracy of Intermittent Demand Forecasting Systems in the Enterprise," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 912-930.
    3. Tian, Xin & Wang, Haoqing & E, Erjiang, 2021. "Forecasting intermittent demand for inventory management by retailers: A new approach," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    4. Petropoulos, Fotios & Apiletti, Daniele & Assimakopoulos, Vassilios & Babai, Mohamed Zied & Barrow, Devon K. & Ben Taieb, Souhaib & Bergmeir, Christoph & Bessa, Ricardo J. & Bijak, Jakub & Boylan, Joh, 2022. "Forecasting: theory and practice," International Journal of Forecasting, Elsevier, vol. 38(3), pages 705-871.
      • Fotios Petropoulos & Daniele Apiletti & Vassilios Assimakopoulos & Mohamed Zied Babai & Devon K. Barrow & Souhaib Ben Taieb & Christoph Bergmeir & Ricardo J. Bessa & Jakub Bijak & John E. Boylan & Jet, 2020. "Forecasting: theory and practice," Papers 2012.03854, arXiv.org, revised Jan 2022.
    5. Pinçe, Çerağ & Turrini, Laura & Meissner, Joern, 2021. "Intermittent demand forecasting for spare parts: A Critical review," Omega, Elsevier, vol. 105(C).
    6. Jože Martin Rožanec & Blaž Fortuna & Dunja Mladenić, 2022. "Reframing Demand Forecasting: A Two-Fold Approach for Lumpy and Intermittent Demand," Sustainability, MDPI, vol. 14(15), pages 1-21, July.
    7. Babai, M.Z. & Dallery, Y. & Boubaker, S. & Kalai, R., 2019. "A new method to forecast intermittent demand in the presence of inventory obsolescence," International Journal of Production Economics, Elsevier, vol. 209(C), pages 30-41.
    8. Prak, Dennis & Rogetzer, Patricia, 2022. "Timing intermittent demand with time-varying order-up-to levels," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1126-1136.
    9. Murray, Paul W. & Agard, Bruno & Barajas, Marco A., 2018. "ASACT - Data preparation for forecasting: A method to substitute transaction data for unavailable product consumption data," International Journal of Production Economics, Elsevier, vol. 203(C), pages 264-275.
    10. Mariusz Doszyn, 2020. "Biasedness of Forecasts Errors for Intermittent Demand Data," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1113-1127.
    11. Prestwich, S.D. & Tarim, S.A. & Rossi, R., 2021. "Intermittency and obsolescence: A Croston method with linear decay," International Journal of Forecasting, Elsevier, vol. 37(2), pages 708-715.

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