Intermittency and Obsolescence: a Croston Method With Linear Decay
arXiv:1409.1609 · doi:10.1016/j.ijforecast.2020.08.010
Abstract
Only two Croston-style forecasting methods are currently known for handling stochastic intermittent demand with possible demand obsolescence: TSB and HES, both shown to be unbiased. When an item becomes obsolescent then TSB's forecasts decay exponentially, while HES's decay hyperbolically. We describe a third variant called Linear-Exponential Smoothing that is also unbiased, decays linearly to zero in a finite time, is asymptotically the best variant for handling obsolescence, and performs well in experiments.