Empirical evidence on individual, group and shrinkage seasonal indices

Chen, Huijing and Boylan, John (2008) Empirical evidence on individual, group and shrinkage seasonal indices. International Journal of Forecasting, 24 (3). pp. 525-534. ISSN 0169-2070

Abstract

This paper provides empirical evidence on forecasting seasonal demand using both individual and group seasonal indices methods. The findings show that the group seasonal indices methods outperform the individual seasonal indices method. This paper also offers empirical results from comparing two shrinkage methods with the group seasonal indices methods. The theoretical rules developed by the authors for choosing between group seasonal indices and individual seasonal indices produce more accurate forecasts than do published rules for choosing between shrinkage methods, when measured by the MSE, and are competitive when measured by the symmetric MAPE.