Forecasting for intermittent demand:the estimation of an unbiased average

Shale, E. A. and Boylan, John and Johnston, F. R. (2006) Forecasting for intermittent demand:the estimation of an unbiased average. Journal of the Operational Research Society, 57 (5). pp. 588-592. ISSN 0160-5682

Abstract

The majority of the range of items held by many stockists exhibit intermittent demand. Accurate forecasting of the issue rate for such items is important and several methods have been developed, but all produce biased forecasts to a greater or lesser degree. This paper derives the bias expected when the order arrivals follows a Poisson process, which leads to a correction factor for application in practice. Extensions to some other arrival processes are briefly considered.