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A study of different Croston-like forecasting methods
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Business Administration and Industrial Engineering.ORCID iD: 0000-0002-1173-6713
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Business Administration and Industrial Engineering. Sveaskog, Kalix, Sweden.
2020 (English)Report (Other academic)
Abstract [en]

An often-adopted technique for short-term forecasting is the single exponential smoothing (SES); it is available in most computer systems for material- and production control. With help from it, it is possible to update continually reorder points for an efficient inventory control. However, the ability for SES to forecast an item when the forecasting time periods often have zero demand is questioned; i.e. slow moving items or when demand is intermittent. Croston presented an idea and method to separate ordinary exponential smoothing in to two parts; the time between demand (withdrawals), and demand size. The forecasts then update only when there is a demand. Since then modifications of Croston’s idea have been suggested and also an idea to measure the fraction of periods with zero demand compared to non-zero demand, i.e. techniques to handle intermittent demand. From the beginning four different suggestions to treat intermittent demand are tested. The tests showed that some complementary modifications were interesting to investigate. The different techniques are compared with Mean Squared Error (MSE), Cumulated Forecast Error (CFE) and with a new bias measure “Periods in Stock” (PIS). Our tests show that Croston’s original idea may be to prefer; some techniques overestimate and others underestimate demand in certain circumstances; and one technique is not to prefer at all.

Place, publisher, year, edition, pages
Luleå, 2020. , p. 19
Keywords [en]
Forecasting, Inventory control, Intermittent demand, Croston, Exponential smoothing
National Category
Reliability and Maintenance Production Engineering, Human Work Science and Ergonomics
Research subject
Quality technology and logistics
Identifiers
URN: urn:nbn:se:ltu:diva-78088OAI: oai:DiVA.org:ltu-78088DiVA, id: diva2:1415140
Note

This is a revised version of the 2014 publication with the same title. Found here: http://urn.kb.se/resolve?urn=urn:nbn:se:ltu:diva-24548

Available from: 2020-03-17 Created: 2020-03-17 Last updated: 2020-03-18Bibliographically approved

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Segerstedt, AndersLevén, Erik

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CiteExportLink to record
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Citation style
  • apa
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Output format
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